Core Scientific – one of the largest digital currency mining firms in the world – has announced it’s filing for chapter 11 bankruptcy protection. The proceedings took place in a federal bankruptcy court in southern Texas.
Core Scientific Is Filing Bankruptcy
Core Scientific has been hinting at potential bankruptcy for some time. It stated in its official court documents that the declining price of bitcoin, as well as rising electricity prices to run its mining centers have become too difficult and heavy to contend with. At the time of writing, shares in the publicly traded company are down roughly 25 percent.
2023 was supposed to be the year in which bitcoin and crypto got the time they needed to heal and recover from the ravaging trends of 2022. During the latter year, bitcoin – the world’s largest and most popular digital currency – dropped more than 70 percent in value from its most recent all-time high of $68,000 per unit. This number was achieved in November of 2021, though about one year later, the currency had fallen into the mid-$16,000 range, and 2022 has been nothing but an embarrassment of sorts for all digital assets.
In addition, Core Scientific is neither the first, nor the only crypto-centered firm to file bankruptcy over the last six months. Others have come along in the form of the Celsius Network, for example, which last summer, caused many eyebrows to raise when the company announced it was going to be halting all withdrawals and preventing customers from gaining access to their money.
From there, the problem got even worse when it was said that the firm would be entering bankruptcy proceedings to prevent vulnerability to angry customers and/or lenders that wanted to be paid back. Other firms – from Three Arrows Capital to Voyager Digital – later followed suit.
Matthew Sigel – head of digital assets research at Van Eck – commented in a recent interview that he thinks things will get a lot worse with bitcoin before they get better. He said:
We think it’s possible, and possibly likely that bitcoin will test the $10,000 to $12,000 level amidst a wave of [bitcoin] miner bankruptcies.
FTX Is Still the Biggest Bankruptcy Story
The biggest bankruptcy story of 2022 arguably came about with FTX, a once respected digital currency exchange that has since fallen into oblivion and may go down in history as a nothing but a criminal haven. First coming to fruition in 2019, the exchange was run by Sam Bankman-Fried and rose through the ranks over the next three years to become one of the biggest digital currency trading platforms in the world.
However, after experiencing a liquidity crunch in November of last year, the company sought aid from Binance and a possible bailout, though this never happened. From there, the company filed bankruptcy and SBF was arrested.
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