Bitcoin Miner Core Scientific May Exit Bankruptcy By September

Paigambar Mohan Raj
Source: WazirX

According to a May 22 court filing, Bitcoin (BTC) mining company Core Scientific’s liquidity has significantly improved. As per the document, the restructuring plans could be ready by September. Considering the market conditions, the company anticipated ending the procedures with an additional $46 million.

The firm also said that it may file a reorganization plan soon. As per the filing, key stakeholders are currently negotiating the plan. The company is attempting to reach a broad “consensus” on what the new Core Scientific would resemble when it emerges from its bankruptcy proceedings.

Can the Bitcoin miner make a comeback?

Core Scientific filed for bankruptcy in December 2022. A Chapter 11 bankruptcy enables a business to carry on operations until all parties can come to an agreement on a restructuring plan. Plans could include actions like scaling back corporate operations to decrease debt or selling off assets to pay creditors.

The firm said that the fall in power cost was one of the main reasons for the increased liquidity. Other important factors include the rising price of Bitcoin (BTC) and a rise in the blockchain’s hashrate.

When Core Scientific declared bankruptcy on Dec. 21, 2022, the price of Bitcoin (BTC) was approximately $16,904. Since then, the cost has increased dramatically—by more than 60%—and is now just below $27,000. In addition, since the bankruptcy filing date, electricity prices have dropped by 24%. Additionally, the hashrate increased by 54%.

Core Scientific anticipates that it will have an extra $46 million in cash once a reorganization plan is complete due to better market conditions. The mining firm is also anticipating a sizeable payoff from Celsius Network. The firm said that the insolvent cryptocurrency lender owes almost $11 million. The two businesses are presently involved in a protracted legal dispute that started on Oct. 19, 2022, when Core Scientific initially accused Celsius of not paying its power bills.