bitcoin (BTC) miner Core Scientific has warned of “substantial doubt” about its ability to continue operations over the next 12 months given the financial uncertainty.
In its quarterly report deposit with the United States Securities and Exchange Commission (SEC) on November 22, the company reported that it had accumulated a net loss of $434.8 million during the third quarter of 2022.
After net losses of $862 million in the second quarter, its total net losses for 2022 stand at $1.71 billion.
The company suggested that to continue operations until November 2023 it will need additional cash, adding that it expects its cash resources “will be depleted by 2022 or earlier”.
“Given the uncertainty regarding the Company’s financial condition, substantial doubt exists as to the Company’s ability to continue operations through November 2023.
He also said he had doubts about his ability to raise funds through financing or capital markets, citing “uncertainties and current market conditions” which have reduced the availability of these types of sources of liquidity.
Rising energy costs, falling Bitcoin price and rising hash rate were also cited as reasons why it is suffering from a liquidity crunch, adding that “substantial doubt exists” with its ability to continue to operate as it is “very difficult to predict when or if Bitcoin prices will recover or energy costs will decline.”
Basic scientist had previously indicated in an Oct. 26 SEC filing that a low Bitcoin price, rising electricity cost, and bankrupt crypto lender Celsius’ refusal to repay a $2.1 million loan could result in the depletion of its cash resources by the end of 2022 or earlier.
Core Scientific has taken steps to alleviate the financial stress it is under, including reducing operating costs, reducing or delaying capital expenditures and increasing accommodation revenue.
He has also decided not to make payments to some of the companies he has borrowed from and warns he could be sued for non-payment and face an interest rate hike as a result.
Core Scientific isn’t the only crypto-mining firm struggling to keep operating in today’s market, with Argo Blockchain looking to raise additional cash through common stock subscriptions and warning that it’s also at risk. risk of cessation of activity if he fails to do so.
Australian mining company, Iris Energy, is also showing signs of financial distress, revealing in a Nov. 21 filing with the SEC that he had unplugged equipment due to units producing “insufficient cash flow”.
The founder of asset manager Capriole Investments, Charles Edwards, has been particularly bearish about the state of Bitcoin mining and noted in a Nov. 22 tweet that this type of response is to be expected when the price of Bitcoin is lower. at the cost of mining.
Bitcoin miners are “unplugging their hardware” because “units are producing insufficient cash flow”.
Iris Energy in bankruptcy.
This is what happens when we spend time below the electrical cost of Bitcoin. It no longer makes sense for many to operate their mining rigs. pic.twitter.com/kjrC6j3KVf
— Charles Edwards (@caprioleio) November 22, 2022