Just days after creditors stepped in to help Core Scientific, the company now appears to be filing for bankruptcy. It is a so-called Chapter 11 procedure in the United States, which keeps the chance of a restart open. The reasons for the bankruptcy are the falling turnover and Bitcoin price.

The rescue came too late

On December 14, Core Scientific received another financial rescue from B. Riley. The plan was to immediately transfer $ 40 million and then another $ 32 million on the condition that it would not repay certain loans for a while. This decision was made after Core Scientific's share price fell from $4.3 billion in July 2021 to $78 million.

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With that market value of July 2021, Core Scientific belonged to the greats of the industry. It now appears that during the past bull run they used a lot of borrowed money to fund and expand operations. That has been a big risk because it is now costing the company the proverbial head. As a result of the long bear market, Core Scientific had to sell 9,618 Bitcoin in April, among other things.

Bankruptcy on December 21

If we are to believe a report from CNBC, Core Scientific is filing for bankruptcy today, December 21. While the company is still generating positive cash flows, the income is not enough to cover operating costs. It includes lease payments on Bitcoin mining hardware.

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It is striking that the shares had a huge revival a week ago. This happened after news that B. Riley was still planning to lend a helping hand. Now it seems that this too is not enough to keep Core Scientific running.

It seems that Microsoft has lost its faith in Bitcoin mining as well. It is no longer possible to use their cloud services for mining without explicit permission from the company. According to Microsoft itself, it is not stable enough.