Crypto Winter: Crypto mining giant sells 80 percent of its bitcoin holdings | news

Crypto winter threatens
Many miners get into trouble
Core Scientific sells part of its Bitcoin holdings

After record highs were reached in November 2021, the prices of several cryptocurrencies have literally collapsed this year. Bitcoin, the world’s most popular cyber currency, fell below the $ 20,000 mark for the first time since 2020 in June, losing more than two-thirds of its value. Many market participants are already talking about an impending crypto winter, where prices will continue to plummet and will not fully recover from this in the coming years. The last time such a winter started was in 2017/18. At that time, for example, Bitcoin collapsed by 80 percent and took years to reach the old heights again because many investors lost interest in digital assets.

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the mining industry suffers

The mining industry is also suffering from this development, because for many of these companies, operating costs now exceed mining sales. You should know that new bitcoins are “sharpened” by solving cryptographic tasks, which in turn are used to generate the data blocks in the blockchain. In the meantime, however, these computer tasks have become so complex that they require huge, expensive server farms. But due to the fall in prices in the crypto market, some miners are now struggling to pay off the debt they incurred when they bought their computers.

Core Scientific sells Bitcoin

One of the miners who ran into trouble appears to be Core Scientific, which is among the largest in the industry with 180,000 servers. In fact, many mining companies often keep their mined coins, either to attract investors who want to invest indirectly in Bitcoin, or because they hope for a long-term increase in the Bitcoin price and thus a strengthening of their own balance sheet.

Despite this, Core Scientific recently reported that it sold a total of 7,202 bitcoins at a price of around $ 23,000 in June, raising around $ 167 million. At the end of the month, the miner owned only 1,959 Bitcoin. According to the company’s information, the cash flow is mainly intended for debt repayment and to expand the data storage capacity. In addition, Core Scientific announced that it will continue to sell self-extracted Bitcoin to cover operating expenses, finance further growth, pay off debt and maintain the necessary liquidity.

“Our industry is being hit hard by weak capital markets, rising interest rates and historically high inflation,” said CEO Mike Levitt. And in fact, Core Scientific is not the only major miner that has partially had to part with its bitcoin holdings. As “Bloomberg” reports, Bitfarms Ltd and Riot have Blockchain Inc. also sold some of their pointed coins.

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