Bloudmine

Cloud Mining

Cloud mining is the easiest and most effective way to make money from cryptocurrency mining without buying and maintaining your equipment.

Get access to real mining power without any extra effort

Blueprint

A perfect balance of exhilarating flexiblity and the effortless simplicity of the Code Supply Co. WordPress themes.

The ultimate publishing experience is here.

Public BTC mining companies face $4B in liabilities, Core Scientific leads the pack

Public Bitcoin (BTC) mining companies collectively have liabilities that amass to over $4 billion, according to Hashrate Index.

Owing the most in liabilities, Core Scientific debt sat at approximately $1.3 billion on Sept. 30, according to a company statement.

Source: Luxor Mining
Source: Luxor Mining

The BTC mining industry has seen significant fluctuations during this bear market — the recent bankruptcy of Core Scientific stands as a testament to volatility of the sector.

Though it is the largest public BTC miner by hashrate, Core Scientific has struggled under debt for many months — unable to pay off monthly debt service payments, according to Hashrate Index.

Warning: Hard Hats must be worn

Core Scientific is not the only public miner struggling with debt. Marathon, the second-largest debtor, owes $851 million, mostly in the form of convertible notes that give holders the option to convert them to stock.

Greenidge, the third-biggest debtor, owes $218 million and is undergoing a restructuring process to reduce its debt.

Deep in Debt

When looking at the debt-to-equity ratio, a measure of how much a company owes relative to its equity, it becomes clear that many public miners have significantly high levels of debt.

Luxor analyst, Jaran Mellerud, stated that, generally:

“A debt-to-equity ratio of 2 or higher is considered risky, but in a volatile Bitcoin mining industry, it should be substantially lower. In the chart below, we can see that there are many public miners with extremely high debt-to-equity ratios.”

Source: Luxor Mining
Source Luxor Mining

Core Scientific has the highest ratio at 26.7, followed by Greenidge at 18 and Stronghold at 11.1.

Argo are In fourth position with a ratio of 5.3 — having accidentally  revealed plans for bankruptcy — stated that it is “negotiating to sell some of its assets and carry out an equipment financing transaction to reduce its debt and improve liquidity,” according to Mellerud.

“Due to the unsustainably high debt levels in the industry, we will likely continue to see more restructurings and potentially some bankruptcies. We have started to enter the part of the cycle where the weak players are flushed out.”

The post Public BTC mining companies face $4B in liabilities, Core Scientific leads the pack appeared first on CryptoSlate.

This post was originally published on this site

Total
0
Shares
Leave a Reply

Your email address will not be published. Required fields are marked *

Prev
Russia’s crypto mining bill could be finalized in January 2023

Russia’s crypto mining bill could be finalized in January 2023

Russia’s cryptocurrency mining bill, which would legalize crypto mining and the

Next
Public Bitcoin mining companies plagued with $4B of collective debt

Public Bitcoin mining companies plagued with $4B of collective debt

The recent bankruptcy filing of Bitcoin (BTC) miner Core Scientific despite a

You May Also Like