Bankrupt Core Scientific Reports Higher Bitcoin Production

Core Scientific, a publicly-listed crypto mining company, was able to increase its Bitcoin (BTC) production in December 2022, despite the Chapter 11 bankruptcy filed last month.

Core Keeps Bitcoin Mining Despite Bankruptcy

Core Scientific has released a summary report for its mining results for November and December 2022. The company mined 1,356 BTC in November and 1,435 BTC in December, increasing its production by 5% month over month (MoM).

The company recorded a modest increase in the number of self-mining servers to 153,000 and the hash rate to 15.7EH/s. In addition to its cryptocurrency rigs, Core Scientific offers data center colocation services for 80.5 thousand customer-owned ASICs. In December, they produced 931 BTC, which is an increase of 17.1% MoM.

The company announced in late December that it was filing for bankruptcy but had no intention of stopping its mining operations. When it went public in July 2021, its valuation reached $4.3 billion, now falling to just $80 million.

Although the entity has been generating positive cash flows, they are insufficient to pay off the debt from leasing its mining machinery. The company wants to continue normal operations by seeking an agreement with senior security noteholders, who hold most of the company's debt.

Company Shuts Down Celsius Mining Rigs

According to a January court decision, Core Scientific shut down 37,000 mining machines associated with Celsius Mining, the company's largest customer. Additionally, Celsius is undergoing Chapter 11 bankruptcy: the company filed on 13 July 2022 along with Celsius Network, its parent company.

Core Scientific wanted to prove in court that Celsius was not paying its dues per the agreement, while Celsius claimed that Core Scientific was raising energy rates, not in accordance with the original contract. The court decision on 4 January 2023 ordered all Celsius-affiliated machines to be shut down, and the company has 75 days to pick them up. During the interim period, they cannot mine new BTC.

Bitcoin Miners Increase Production

Despite the prolonged crypto winter, many publicly-listed miners were able to boost their BTC production numbers in December and the entire year. HIVE Blockchain Technologies (HIVE) reported a production increase this week of 18% to 4,752 BTC on a yearly basis.

However, the company pointed to the increasing difficulty of Bitcoin mining, which severely limits profits. To counter this unfavorable phenomenon, HIVE is constantly investing in new equipment. In 2022, the company acquired 3,570 Bitmain S19j Pro miners and 1,879 HIVE BuzzMiners.

Bitfarms, another cryptocurrency mining company listed on NASDAQ, published its latest Bitcoin mining update last week. While the miner produced 5,167 BTC, 50% more than it did in 2021, it increased its sales to cover ongoing operating costs and liabilities.

Falling Bitcoin prices made 2022 a challenging year for the industry on the whole as BTC miners made 37.5% less revenue than in 2021, earning $9.55 billion.