Core Scientific Miner near to exit from Bankruptcy

[Faisal2202]

i just read the news and this was already shared here before when Core Scientific Filed for bankruptcy. Why? the reasons are here.

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.

Core Scientific is a bitcoin mining firm in Austin Texas at United States of America. On the 21 of December, 2022, they have filed for bankruptcy protection for the down fall of the industry...

Following FTX's liquidity crisis and bankruptcy, the largest mining company "Core Scientific" has filed for bankruptcy....

But the good news is, they have some stats, stating that they have enough funds to exit from the bankruptcy. it's means now they will be in the market and mining BTC as usual.

On Dec. 21, 2022, when Core Scientific filed for bankruptcy, Bitcoin’s price was $16,904, according to CoinMarketCap. Since then, the price has shot up by over 60%, currently sitting at around $27,000.

Additionally, power prices have decreased by 24% since the petition date according to the filing, while the network hashrate has jumped by 54%.

Source

But what good is it for the market? As, back then they sold many BTC and which might have affected the price of BTC, but now what will be the effect of their recovery? Because i am confused is it good for BTC or not?

[OcTradism]

Problems with small and new mining farms are they don't have enough experience in Bitcoin market to understand the extreme of bear market. When they started their mining business, they imagined about rosy future but life is not rosy. They thought of rosy future and bet with high leverage, they don't have any or enough reserve for bad scenarios like bear market.

At the end, they end with bankruptcy in bear market. Bear market should be a golden chance for mining farms to get more mining rewards when weak mining farms go capitulating.

[Tytanowy Janusz]

But what good is it for the market? As, back then they sold many BTC and which might have affected the price of BTC, but now what will be the effect of their recovery? Because i am confused is it good for BTC or not?

Those are all old news. The newest is almost half year old. Everything is priced in. "The adventures of a miner" can have a short-term impact on the price, a temporary dump, that's all, not long-term course behavior.

"In its bankruptcy petition, Core Scientific said it has $1 billion to $10 billion in assets and liabilities,"

If its the worse case scenario, 10 billion liabilities, all in bitcoin that needs to be dumped (i'm 100% its not that bad) ... its only 2% of bitcoins.
A realistic scenario is probably $ 500 million in bitcoin potential dump, which means 0.1% supply.

[death69]

But what good is it for the market? As, back then they sold many BTC and which might have affected the price of BTC, but now what will be the effect of their recovery? Because i am confused is it good for BTC or not?

Those are all old news. The newest is almost half year old. Everything is priced in. "The adventures of a miner" can have a short-term impact on the price, a temporary dump, that's all, not long-term course behavior.

"In its bankruptcy petition, Core Scientific said it has $1 billion to $10 billion in assets and liabilities,"

If its the worse case scenario, 10 billion liabilities, all in bitcoin that needs to be dumped (i'm 100% its not that bad) ... its only 2% of bitcoins.
A realistic scenario is probably $ 500 million in bitcoin potential dump, which means 0.1% supply.

Indeed, the recovery of Bitcoin from entities like Core Scientific can impact the market, but only to a certain extent. If we dive into the mechanics of supply and demand, any sudden increase in supply - such as Core Scientific offloading a substantial amount of Bitcoin - could theoretically depress the price. This is due to the increased liquidity and availability of Bitcoin.

However, as you rightly pointed out, even in the worst-case scenario, the Bitcoin potentially unloaded onto the market would only make up 2% of the total supply. In a market as large and as global as Bitcoin's, this is unlikely to cause any significant long-term impact.

Furthermore, the Bitcoin market is notoriously resilient and has shown an impressive ability to absorb such shocks. Even if there were a short-term price drop, this could potentially be viewed as a buying opportunity by other investors, which would then help to stabilize the price.

[kryptqnick]

Do I understand correctly that they were basically saved by the increase of Bitcoin's price? Another factor was that the energy prices decreased by 24%, which helped them as well. I suppose that's good news, although I don't think their bankruptcy was a big deal in the grand scheme of things. After all, mining doesn't directly affect Bitcoin pricing, and it's just one mining company, even though it was valued at several billion dollars worth of assets. It's good when companies are back in business, it can be encouraging news for others who are struggling or unsure right now.

[Aanuoluwatofunmi]

Bitcoin can actually save one from any disappointment in life if the opportunity in its inves was made maximized, this just let me remember about El-Savador where bitcoin was firstade a legal tender and they take every necessary action to ensure that the scale through and receives the best impack bitcoin could contribute in their economy while paying it debts, am sure Core Scientific Miner were one of the investors that invest and hodl when bitcoin was dip.

[Husires]

The problem of these companies is loans, not mining bitcoins. The loans have a repayment period, and when the repayment period comes, you will find that the company needs a lot of liquidity, either to pay the electricity or workers expenses, or to pay off the loans, and therefore it resorts to selling part of the bitcoins to cover that.

When the lender knows about the company’s situation and their need for liquidity, the bitcoins are sold at a large discount far from the current trading price, so it is an additional loss for them.

The impact of the Bitcoin price is not significant in the short term as they have additional variables such as mining difficulty, energy prices, depreciation and competition for Bitcoin mining.

The bankruptcy filing is to reschedule the debt on better terms.

[yazher]

Problems with small and new mining farms are they don't have enough experience in Bitcoin market to understand the extreme of bear market. When they started their mining business, they imagined about rosy future but life is not rosy. They thought of rosy future and bet with high leverage, they don't have any or enough reserve for bad scenarios like bear market.

At the end, they end with bankruptcy in bear market. Bear market should be a golden chance for mining farms to get more mining rewards when weak mining farms go capitulating.

In other words, they put a lot of money without realizing the consequences and now it's really bad that they are going to lose it all just because of their worse decision from the start. This is why you really need to consider doing your own personal research before investing or buying some miner's sets because you may end up miscalculation your earnings and might gonna also lose your capital if you don't know how bad the volatility of the crypto market can turn in a day. That's why for the past years only heavy miners are benefiting because the small miners are already sold their components due to the increasing electricity bill and the tax.

[franky1]

The problem of these companies is loans, not mining bitcoins. The loans have a repayment period, and when the repayment period comes, you will find that the company needs a lot of liquidity, either to pay the electricity or workers expenses, or to pay off the loans, and therefore it resorts to selling part of the bitcoins to cover that.

When the lender knows about the company’s situation and their need for liquidity, the bitcoins are sold at a large discount far from the current trading price, so it is an additional loss for them.

The impact of the Bitcoin price is not significant in the short term as they have additional variables such as mining difficulty, energy prices, depreciation and competition for Bitcoin mining.

The bankruptcy filing is to reschedule the debt on better terms.

it was more of mitigating actual losses before needing to sell coins. by forcing an issue to extend their operations hoping to break even by the time they exit banktruptcy

more precisely:
CS went into bankruptcy in december because a firm that gave CS asics had a deal whereby the firm would pay the supply of CS electric in return of bitcoin rewards. (thus the private firm pre-bought hardware and paying the electric making them the creditors)
due to market price corrections(new lows) the firm received less value than expected(not enough to pay the electric and break even). thus the firm didnt pay as much electric for CS to use. so CS stopped paying out rewards in october as a counter reaction..  holding the equipment hostage.
then CS filed for bankruptcy in december to legally hold onto the equipment for atleast another 6 months(should have ended june 2023) while auditors done their thing under bankruptcy rules.

recently the judge ordered CS to hand over $20m worth of asics back to the firm and then allowed an extension until september2023 to sort out the rest of the deal to exit bankruptcy