Trusted

Core Scientific Gets $37.5M Loan to Stay Afloat; BlackRock Among Creditors

2 mins
Updated by Paolo Besabella
Join our Trading Community on Telegram

In Brief

  • BlackRock issued a $17 million loan to bankrupt Bitcoin miner Core Scientific.
  • The bankrupt miner plans to apply for the remaining $37.5 million loan in January.
  • Bitcoin miners struggled throughout 2022 due to tough market conditions.
  • promo

The world’s largest asset manager, BlackRock Inc., has issued a $17 million loan to bankrupt Bitcoin miner Core Scientific to help it stay afloat during its bankruptcy process. The loan is part of the court-approved $37.5 million loan for the bankrupt miner.

A Dec. 22 SEC filing revealed that BlackRock, alongside other lenders, agreed to give a debtor-in-possession (DIP) facility commitment loan of about $75 million to the BTC miner.

BlackRock Loans Bankrupt Miner $17M

However, only $37.5 million of the loan was approved. According to court documents, the loan is from Creditors who already possess the company’s convertible notes. Like the other lenders, BlackRock’s credit owns a part of its $550 million Core Scientific’s convertible notes.

Reuters reported that Core Scientific plans to apply for the remaining $37.5 million DIP loan in January. Meanwhile, court filings have indicated the loan has a 10% annual interest rate. 

A representative of the creditors, Kris Hansen, said the loan was a show of faith in the bankrupt firm. Hansen added that it is a belief in the system, regardless of Bitcoin’s recent challenges and plunging value.

Core Scientific is expected to use the loan to stay afloat during its bankruptcy. The firm filed for chapter 11 bankruptcy on December 21, citing unfavorable market conditions.

Bitcoin Miners Face Steep 2023

Bitcoin miners struggled considerably in 2022 because of the bear market situation alongside the rising mining difficulty of the coin. According to reports, BTC mining hashrate and profitability decreased dramatically throughout 2022.

Speaking on the situation, the founder of Capriole Fund, Charles Edward, said, “this is by far the most brutal Bitcoin miner capitulation since 2016 and possibly ever. Hash Ribbons capitulation has captured the lowest Bitcoin hash rate reading of 2022 as miners bankrupt and default under the great pressure of squeezed margins globally.”

The head analyst at Blockware, Joe Burnett, said:

“The current Bitcoin miner capitulation is looking deadly. Mining difficulty is projected to fall by more than 10%, and the price has much further downside. Hard to imagine who is still willing to hold BTC here.”

Meanwhile, another analyst, Alex McWhirter, pointed out that mining machines were also becoming unprofitable. McWhirter said, “the biggest baddest Bitcoin miner you can buy today makes about $1/day at current prices. You have to buy these as a whole shipping container, 200 miners, about $1M to buy that. $1M to mine $200 per day. Seems unsustainable, what if BTC drops lower?”

Core Scientific Bitcoin Miner
Source: Twitter
Top crypto projects in the US | November 2024
Coinbase Coinbase Explore
Coinrule Coinrule Explore
Uphold Uphold Explore
3Commas 3Commas Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | November 2024
Coinbase Coinbase Explore
Coinrule Coinrule Explore
Uphold Uphold Explore
3Commas 3Commas Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | November 2024

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

Oluwapelumi-Adejumo.png
Oluwapelumi Adejumo
Oluwapelumi Adejumo is a journalist at BeInCrypto, where he reports on a broad range of topics including Bitcoin, crypto exchange-traded funds (ETFs), market trends, regulatory shifts, technological advancements in digital assets, decentralized finance (DeFi), blockchain scalability, and the tokenomics of emerging altcoins. With over three years of experience in the industry, his works have been featured in major crypto media outlets such as CryptoSlate, Coinspeaker, FXEmpire, and Bitcoin...
READ FULL BIO
Sponsored
Sponsored