Bitcoin Miner Core Scientific Shares Drops 76% Amid Financial Pressure

Bitcoin mining company Core Scientific recently announced that it would pause its debt repayments due to rising financial pressure. This has led to a rapid decline in its shares, CORZ, to as low as $0.23.

Core Scientific to Halt Debt Repayment

According to a filing submitted to the United States Securities and Exchange Commission, Core Scientific will not make its debt repayments “due in late October and early November 2022.” 

The filing further stated that creditors could take measures to penalize the Bitcoin miner if they delay beyond any grace period.

“The creditors under these debt facilities may exercise remedies following any applicable grace periods, including electing to accelerate the principal amount of such debt, suing the Company for nonpayment or taking action with respect to collateral, where applicable,” the statement added.

The mining company noted that it has 24 BTC and about $26.6 million in cash. It shows a total of 1,027 BTC has been sold by the company in the space of one month. As of September 30, the firm had 1,051 BTC and approximately $29.5 million in cash. Recall that in July, the mining company sold 7,202 BTC to combat financial pressure.

Core Scientific mentioned in the filing that its cash holdings will be depleted by the end of 2022 unless its financial pressures are lessened. This is possible only if the price of BTC rises from its lows or the cost of electricity bills reduces.

The financial pressure faced by the company has now rubbed off on its shares CORZ, which has plunged to a current price of 23 U.S. cents.

Core Scientific Impacted by Celsius Crash

When mentioning the causes of the liquidity pressure, Core Scientific cited its exposure to the insolvent crypto lender Celsius Network.

Earlier this month, the mining firm revealed that it has a $2.1 million exposure to Celsius from August and September invoices. Due to the terms of the agreement, Core noted that it loses $53,000 daily due to the increase in electricity tariffs, as Celsius refuses to cover its debts.

Bitcoin Miners Hit by Bear Market

Due to the ongoing bear market that has impacted the price of the leading cryptocurrency Bitcoin, several Bitcoin mining companies have struggled with their financial stability.

An earlier report revealed that Bitcoin miner Argo Blockchain noted that it will take some steps to secure $40 million for its finances. One of the steps was the sale of 3,400 of its mining machines.