The sell-off triggered by bitcoin miners is still ongoing amid rising electricity costs and a weakening cryptocurrency market. Core Scientific (CORZ), the world’s largest listed cryptocurrency mining company, announced its first half of this year’s financial results. It is worth noting that the company sold 7,202 bitcoins at an average price of $23,000 in June, cashing out $167 million.
Core Scientific held 1,959 bitcoins and $132 million in cash on its balance sheet at the end of June. That means the company sold more than 78.6% of its overall reserves in bitcoin.
Core Scientific explained that the cash proceeds from the sale of the 7,000+ bitcoins were used to pay for ASIC miner servers, capital expenditures for additional data centers, and debt repayment. At the same time, the company plans to deploy an additional 70,000 ASIC mining servers by the end of the year, in addition to the existing 103,000.
Core Scientific CEO Mike Levitt said: “We are working hard to strengthen our balance sheet and strengthen our liquidity to meet the challenging environment and continue to believe that by the end of 2022, our data centers will be operating at 30EH per second.
Mike Levitt said: “We remain focused on executing our plans while taking advantage of opportunities that may arise that are not traditional.
Core Scientific also stated that it will continue to sell the bitcoins it has mined in the future to cover operating costs and provide sufficient liquidity.
Core Scientific announced that mining generated 1,106 bitcoins in June, or about 36.9 bitcoins per day, slightly higher than in May. The company said the increase in bitcoin production was helped by the deployment of new mining rigs in June, and while mining operations were somewhat affected by tight power supplies, Core Scientific’s daily output rose by about 14 percent in June.
Core Scientific, a listed miner selling bitcoin, what does it mean for the crypto market? In mid-June, Will Clemente, chief analyst at Blockware Solutions, accurately predicted that miners would sell cryptocurrencies. The graph clearly shows that fewer mining machines are in operation, which is corroborated by the increased selling of bitcoins by miners.
With energy prices soaring and cryptocurrency prices plunging, bitcoin miners are struggling to stay profitable, and many mining companies are dumping bitcoin.
On June 21, Bitfarms, the largest cryptocurrency mining company in North America by computing power, said it had sold 3,000 bitcoins in the past seven days, noting that the company would no longer hoard all the bitcoins it produces every day, but instead chose to act. Improve liquidity, deleverage to optimize the company’s balance sheet.
Another company, RiotBlockchain, sold 250 bitcoins for $7.5 million, while Marathon Digital said it may consider selling some bitcoins.
In this regard, Sami Kassab, an analyst at research firm Messari Crypto, said that if mining revenue continues to decline, some of these miners who have borrowed high-interest loans may face the risk of liquidation and may even eventually go bankrupt, while a strategist at JPMorgan Chase & Co. The team said that the selling wave of bitcoin miners may continue into the third quarter of this year.
But for miners with healthy cash flow, the industry reshuffle is a very good opportunity for further development.
Post time: Aug-31-2022