- Core Scientific is filing for Chapter 11 bankruptcy in Texas.
- The crypto-mining company’s market capitalization had fallen to $78M on Tuesday.
- Core Scientific is still generating positive cash flow, but not enough to pay back the debt.
With the effects of the harsh winter crypto season rising, share prices of bitcoin mining
companies are still below BTC. Core Scientific, one of the largest crypto-mining companies, is filing for Chapter 11 bankruptcy in Texas.
According to a report by CNBC, Core Scientific’s market capitalization had fallen to $78 million on Tuesday, and the stock price of CORZ fell more than 98% last year.
The crypto-mining company is still generating positive cash flow, but not enough to pay back the debt, according to the report. Crypto-mining requires expensive equipment, technical knowledge, and a lot of electricity, which implies the cause of its rising debts.
In October, Core Scientific sent a statement to the Securities and Exchange Commission (SEC) questioning the possibility of bankruptcy. At that time, the company claimed that it would be difficult for them to make payments in late October and early November.
With the crypto winter causing more damage, a crypto analyst also identified that crypto-mining companies such as Argo Blockchain, Marathon Digital, and Riot face a huge loss. The share prices of these crypto mining companies are currently under BTC by a large margin.
The crypto community has observed the price of Bitcoin has fallen down from its all-time high. Currently, BTC’s price is at $16,816, experiencing a fall of 5.55%, at press time.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
