Share price for struggling bitcoin miner Core Scientific rises 200%

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Bitcoin (BTC) miner Core Scientifics stock has soared nearly 200% in the past four days following positive reception of a Dec. 14 funding proposal from a current creditor who hopes that the company will be able to avoid bankruptcy.

Shares of the beleaguered miner were trading at just over 13 cents on December 12, before climbing to almost 40 cents at the close of the market on December 15 with a gain of 198%.

A five-day chart showing the price of Core Scientifics stock on the Nasdaq. Source: Trading View

According to financial media company Marketbeat, traders bought 6,572 call options on Dec. 15, 136% more than the average volume of 2,780, indicating that many are bullish on the stock and betting the price will continue to rise.

Some members of the Bitcoin community were also acquiring shares, hoping for a huge return if the funding plan materializes and the company can survive through the bear market.

I bought a $CORZ slug at the close. If the funding materializes and they can survive through the bear market, this trade could become an absolute MONSTER. DYOR. For your reference: pic.twitter.com/eHF4NXjcvH

— RC (@CashRocket) December 14, 2022

The rally could be the start of a reversal, or just a dead cat bounce. Core Scientific has been hit with a string of bad news throughout 2022 and despite recent gains, the price is still 95% lower than it was at the start of the year.

On Dec. 14, financial services platform B. Riley penned a letter to Cores shareholders and lenders, outlining a $72 million funding plan that it says is enough to keep the miner out of trouble. forced to file for Chapter 11 bankruptcy.

If the deal is accepted, the first $40 million would be funded immediately, with no contingencies, while the rest of the funds would be issued if Core agrees to suspend payments to equipment lenders until the price of Bitcoin recovers. above $18,500 per price. the cryptocurrency has been below since November 9.

B. Riley suggests that the funding will provide Core with two years of operating cash and notes that their analyst predicts the miner can generate annual revenue of around $165 million at a Bitcoin price of $18,000, with $20 million additional dollars for every $1,000 price increase. .

Related: How Tough Has This Bear Market Been For Bitcoin Mining? Watch the market talks on Cointelegraph

Core has been hit hard by the general market downturn and filed a report on Oct. 26 citing a low BTC price, high electricity rates, and bankrupt crypto lender Celsius’ refusal to repay a $2.1 million loan. dollars as reasons why he might default on some of his debts.

The bad news continued on November 22, when the miner admitted in a quarterly report that its cash reserves could be depleted by the end of 2022 and that it did not believe it would be able to raise funds through the through financing or capital markets given the current market. conditions.

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