News JVTech Bitcoin: The Winter Of Cryptos Makes Another Victim…
While Bitcoin has struggled to keep its price around $20,000 since the fall of cryptos, companies in the sector continue to pay the fees. Going from abundance, after the speculative bubble of 2021, to a lack of liquidity, this Bitcoin giant is now on the verge of bankruptcy.
The new victim of the crypto bear market
It has certainly not escaped your notice that cryptos have experienced a significant decline in the past year. Dropping from about $54,000 to $20,000 today, Bitcoin has taken all other cryptos down with it.
As a result, several companies in the industry are struggling after the market entered its famous bear market cycle. While many companies have taken steps to stay on track to get through the crypto winter, the mission is more complicated for Core Scientific.
Core Scientific is considered the largest bitcoin mining company in America and recently announced that it is going through turbulent times.
In a document communicated on Oct. 26, the company indicated to the U.S. Securities and Exchange Commission (SEC) financial officer that it had no liquidity to ensure the company’s sustainability through the end of the year:
“The company estimates that existing cash resources will be exhausted by the end of 2022, if not sooner. »
In this sense, Core Scientific is already anticipating by announcing a possible bankruptcy by the end of the year, if no solution is considered.
“Given the uncertainty surrounding the company’s financial conditions, there are substantial doubts as to whether it will be able to survive for a reasonable period of time. »
This news is worrying because the fall of this giant could disrupt the entire ecosystem.
As stated in the report, the company could generate significant losses for all shareholders: “the holders of the company’s stock could suffer a total loss of their investments”.
Even worse, the mining giant contributes 5% to Bitcoin’s computing power (hashrate). In this sense, the news, while not necessarily affecting the cryptocurrency network in the medium and long term, may cause panic among investors.
Furthermore, since these somewhat reassuring announcements for the industry, Core Scientific’s action has been unscrewed downwards.
Core Scientific: The mining giant trusts the fate of Bitcoin and cryptos
Through the documents provided, the mining company explains that it is difficult to estimate its financial needs due to the volatility prevailing in the crypto market. So the future of the Bitcoin (BTC) mining behemoth seems sealed, but there is still some hope for a recovery.
Indeed, of the scenarios that could allow Core Scientific to get back on its feet, a rise in the price of Bitcoin seems to be the best news for the company. If Bitcoin ever gains value again, Core Scientific could benefit. Still, such a possibility seems utopian two months into the year.
This announcement adds to an already unwanted context. Indeed, in recent months, many companies in the sector have begun to take steps to survive the crypto winter. Crypto platforms such as Binance, Crypto.com, Coinbase or the NFT marketplace Opensa have been anticipating mass layoffs to continue their operations.