Core Scientific sells over 7k Bitcoin to raise $167M

[coinmashco]

Crypto mining firm Core Scientific sold over 7,000 Bitcoin in June via the open market to bring its holdings down to about 70% over the previous month.

The US-based company said in a public statement on Tuesday that it had roughly raised around $167 million after selling 7,202 BTC at an average price of $23,000. The firm was left with 1,959 BTC and $132 million in cash as of Jun 30 – a drop from 8,058 BTC holdings compared to its 31st May filings.

Core Scientific mainly used the proceeds from the sale for ASCI server maintenance, debt repayments, and investments in additional data-center capacity. The company hopes to continue selling BTC gained through mining operations to further fund operations, maintain liquidity, and reduce debts.

CEO Mike Levitt said in a statement:

“Our industry is enduring tremendous stress as capital markets have weakened, interest rates are rising and the economy deals with historic inflation.”

He added:

“We are working to strengthen our balance sheet and enhance liquidity to meet this challenging environment, and continue to believe that we will be operating in excess of 30 EH/s in our data centers by year-end 2022.”

The firm was able to generate 1,106 Bitcoin in June – roughly 37 Bitcoin a day – exceeding the May outputs by a slight margin. Additional server deployments in June helped it achieve a higher daily output of approximately 14%.

Self-mining and crypto mining activities account for 57% of its current data-center capacity of more than 180,000 servers – as of Jun 30. The company is expected to release its earnings for the second quarter on Aug 11.

The current market crash has forced several mining firms to liquidate holdings to fund operations. Bitfarms, a Canadian crypto mining firm in June sold 3000 BTC, roughly 47% of its holdings, for $62 million to fulfill working capital requirements.

source: https://coinmash.co/core-scientific-sells-over-7k-bitcoin-to-raise-167m/

[jackg]

I can't decide if this is bullish or bearish news (it feels quite neutral). A mining farm raising capital to pay for its facility makes sense and the huge amount of goat the market has been able to absorb is also quite impressive imo. It'd make sense for miners to have a figure at which they need to sell their reserves to pay for everything too.

[franky1]

one thing i am noticing lately

these mining farms usually sell 'off-market' via private deals on OTC platforms.
but this last month or two there are less whales on OTC platforms buying privately, which has made some farms have to sell on the public market.
asic farms have and do sell regularly but usually its not seen on the public market. apart from a couple times in the last couple months it has been more noticeable that they are now selling on the public market


as for how to interpret the wording of this topics message, my opinion..
yes this topic is talking about their usual activity, selling coin to pay:
electric,
(biasedly worded as 'debt'.. funnily enough when we all get electric bills in the post we all owe the electric company)
salaries,
(biasedly worded as 'debt'.. funnily enough at the end of the month companies do owe employees a wage)
paying off asics
(biasedly worded as 'debt'.. funnily enough when pre-ordering asics with a deposit, near delivery time they owe the remainder)

point is
they are buying more asics and more facilities so they are bullish to stay in mining, and expanding. nothing in the topic message says they are selling asics and shutting down

..
some math for interest..
electric is about ~20% of a 'coin' value (based on maths i done on many things in the past topics. rest of coin costs is the more physical costs of hardware and facilities spread out over time and per coin)

(below is not accurate, but using the assumptions of the content of this topics post)
based on the '180,000 server' statement (meaning 180k asics) if using the 2021 gen asics of 110thash would put them at 19.2exa. meaning if they are buying 2022 batch asics of say the 140thash and wanting to achieve 30exa
thats 10.8exa  
(10.8m /140=77143)
77143 asics being purchased this year. and at a price of $11.6k each
would be nearly $900m if all paid in one lump. (~$150m per month over 6 months)
so 'needing' only $167m this month is like paying off that order at a monthly amount spread over 6 months
where by it also shows they are paying off a few months of electric contract..

so i dont see it as them owing any large multimillion 'loan' debt.. its instead just the cost of doing business amounts.. of paying their monthly bills

[Leviathan.007]

Still, I cannot be sure if that's a piece of good news or a bad one because selling this huge amount of bitcoin at the average price of 23K which is much lower than this should be cannot be good for them but on t,he other hand some companies and investors will sell bitcoin at this price wait for the price to reach the lower price levels to buy back and that's how they lower their average buying price and they can get more profits like that, also many companies need to have some more liquidity and this can be another reason for them to sell at current price.

[DaveF]

I can't decide if this is bullish or bearish news (it feels quite neutral)....

Still, I cannot be sure if that's a piece of good news or a bad one...

It's neither, they are a public company and they are required to give out this information.
Since we don't know how many of the large private farms operate we really can't tell how many operations of this size are doing what.

It really is more a data-point then anything else.
7kBTC and $167 Million over 30 days is about as important a fact towards the market as Dave was out of the good coffee this morning and is drinking some really old stuff.
70kBTC and $1.7 Billion may move the needle a bit more, but 7k not that big a deal.

-Dave

[franky1]

Still, I cannot be sure if that's a piece of good news or a bad one because selling this huge amount of bitcoin at the average price of 23K which is much lower than this should be cannot be good for them

you see it as huge.. but its in actual effect just 1 or 2 months of business cost.
much like an african sees $2k as huge, but to an american its just 1-2months of min wage income
the african thinks their 1-2month costs are just $50 and so seeing someone spend or get 40X seems unbelievable

as for selling coins for $23k..
thats their sell price not their mining cost of those coins..

their mining costs would presumably be lower based on most efficient asic farms costs.
(this month is about $15k coin COST for efficient mining (electric and hardware and facility costs included))

so they did not sell at a loss in my view (unless they are a bad managed farm with inefficient miners and high electric costs)

but on t,he other hand some companies and investors will sell bitcoin at this price wait for the price to reach the lower price levels to buy back and that's how they lower their average buying price and they can get more profits like that, also many companies need to have some more liquidity and this can be another reason for them to sell at current price.

yes some farms/pools do infact also do this(shorting), but that is playing the markets and not as predictable. you cant truly know when the next dip is.
and some also switch from mining to buying when there is opportunity. to get coins cheaper if their inefficient mining costs are higher than market rate. but that is not about selling what they have. but instead just buying instead of mining