Crypto Biz: Contagion Engulfs Bitcoin Miners As Bear Market Continues
Never underestimate how quickly things can go downhill in an industry as volatile as crypto, especially in a bear market. Prices can still drop in the depths of crypto winter and losses can multiply overnight. 2022 has been a year of endless contagion; with everyone focused on BinanceHigh Level Bitcoin (BTC) miners were going bankrupt.
This week, mining company Core Scientific filed for Chapter 11 bankruptcy. Greenridge, another miner, received a $74 million lifeline for debt restructuring of the New York digital investment group. Bitcoin is the most valuable commodity in a bear market, but miners need to keep the light on.
The news is not all negative on the mining front. This week, German miner Northern Data announced that it expects generate up to $206 million in revenue of its mining operations this year. It also has no financial debt on its books, giving it more flexibility to deal with market conditions.
This week’s Crypto Biz dissects Core Scientific’s financial troubles, FTX’s recovery warning, Celsius’ potential bidder pool, and Visa’s latest intellectual foray into crypto.
Bitcoin Miner Core Scientific Reportedly Files for Chapter 11 Bankruptcy
The crypto contagion has spread to the Bitcoin mining industry, with Core Scientific miner reportedly filed for Chapter 11 bankruptcy in Texas. The news fell a few days later a creditor offered Core Scientific $72 million to help shore up its finances amid the bear market. This agreement did not come to fruition. However, Core is expected to continue mining operations and has no plans to liquidate its remaining BTC. The company was forced to offload 9,618 BTC in April to remain operational. Other Bitcoin miners are also feeling the pinch and are looking for various ways to protect their operations during an extended bear market.
FTX warns it will reclaim political donations and contributions
When you think you’ve heard everything you needed to hear about Sam Bankman-Fried and FTX, new developments emerge. This week, the bankrupt crypto exchange warned that anyone receiving political donations or contributions from SBF or other FTX executives could recover these funds as part of a fund recovery process. It may have been triggered by some Democratic recipients presenting himself and undertaking to return the funds now tainted. Do you know who else has received campaign donations from SBF? Biden’s 2020 election campaign. So far, the president hasn’t reported if he would return the $5.2 million value of the donations SBF made to its campaign during the 2020 presidential election, but that could change. It is a story to follow.
Sharing our just released press release: FTX Debtors Announce Process for Voluntary Return of Avoidable Payments https://t.co/l57F7zgKPJ
—FTX (@FTX_Official) December 19, 2022
Celsius gathers 30 potential bidders for its assets, motion to withdraw is approved
Bankrupt crypto lender Celsius has has amassed a long list of potential buyers for its remaining assets, prompting cautious optimism about its ability to sell its retail platform and mining business at a competitive price. Since September, more than 125 parties have been contacted and 30 potential bidders have emerged. Celsius’ latest presentation, as part of its bankruptcy proceedings, suggested the company’s valuation was $2.6 billion as of November 25. The company has a $1.2 billion hole in its balance sheet. In other words, $5.5 billion is owed to users against only $4.3 billion in assets.
Visa thinks up plans to let you pay bills automatically from your crypto wallet
Despite all the fear, uncertainty and doubt plaguing the cryptocurrency market, we can always count on Visa for positive reinforcement. The crypto-friendly credit card giant recently proposed a commercial solution to streamline digital asset payments. While still in the experimental phase, Visa is imagining an auto-payment feature allowing crypto users to withdraw funds directly from their Ethereum-powered self-custodial wallets. They can then use these funds to make automatic payments on their phone bills, Netflix subscriptions, and other recurring charges. It’s a very technical proposition, but we’ve dissected it in layman’s terms to give you the full scoop.
Before you go: is Binance insolvent or is it just FUD?
How far will the crypto contagion spread? As centralized platforms fall by the wayside, resulting in the collapse of FTX in November, more and more people are paying attention to Binance. Secured or not, Binance has been at the center of controversy over concerns about its financial health and rumors that the exchange will become the target of a US money laundering prosecution. In this week’s Market Report, I sat down with Marcel Pechman and Joe Hall to discuss any merit of Binance FUD. You can watch the full replay below.
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