Bitcoin Miner Core Scientific Stocks Plunge 70% After Bankruptcy Warning
One of the largest publicly traded crypto mining companies in the U.S, Core Scientific, has seen a massive plunge in their stock prices after raising the possibility of bankruptcy and being unable to pay back their debts these next coming months.
On The Bankruptcy Warning
The company reported that it will not make its debt payments coming due in late October and early November, warning that it may have to file for bankruptcy if it fails to improve its financial condition.
“Substantial doubt exists about the company’s ability to continue as a going concern for a reasonable period of time,” they explain in a filing on Thursday.
Core Scientific also explains that it anticipates its remaining funds to be depleted by the end of the year if things don’t improve, possibly even sooner than that.
“With the substantial decline in mining rig prices in 2022, we believe there’s a significant chance the creditors holding this debt decide to restructure instead of taking possession of the collateral,” Compass Point wrote.
“Still, without knowing how discussions are going with CORZ’s creditors, we think a scenario where CORZ has to file for Chapter 11 protection has to be taken seriously, especially if BTC prices decline further from current levels.”
Bitcoin’s Recent Prices
This past year has been a rough one for Bitcoin, with BTC’s price way below its all time high of around $69,000 in November last year. Now, Bitcoin has been hovering around the $19,000 to $20,000 for the past couple of months, struggling to break out of this range.
Despite that, many investors claim to have high expectations for Bitcoin’s price to rise again sometime soon. This is due to the fact that Bitcoin mining has been going at a faster rate than ever, with its hashrate hitting new all time highs and breaking previous records.
Aside from that, investors are also very aware of the fact that Bitcoin’s next halving isn’t too far away, scheduled and expected to take place early 2024, BTC’s price is predicted to rise months in advance of the halving.
However, whether Bitcoin will be able to break out of this $20,000 price range before the end of this year like Core Scientific has warned still remains debatable in the community, creating even more tension for the large Bitcoin miner.