Bitcoin Miner Core Scientific Reportedly Filed for Bankruptcy Due to Crypto Crash and Rising Energy Costs – Bitcoin (BTC/USD)

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Core Scientific CORZ, one of the largest publicly traded Bitcoin BTC/USD mining companies in the United States, is filing for Chapter 11 bankruptcy early Wednesday morning, CNBC reported, citing sources.

What happened: According to CNBC, the sweeping move follows a year of plummeting cryptocurrency prices and rising energy costs.

Core Scientific’s market capitalization has dropped significantly, from a valuation of $4.3 billion in July 2021 when it went public via a special purpose acquisition vehicle (SPAC), to just $78 million. after market close on Tuesday. This marks a decline of over 98% in the stock’s value over the past year.

Core Scientific did not immediately respond to Benzinga’s request for comment.

See more: Best Crypto Day Trading Strategies

The premise behind Core Scientific’s business model is to mine proof-of-work cryptocurrencies like Bitcoin. Supported by highly efficient data centers and specialized computers, the process validates transactions and simultaneously creates new monetary tokens, all at the expense of expensive equipment that consumes large amounts of electricity.

The company previously warned in a filing in October that its common stockholders could suffer a total loss of their investment. The bitcoin mining company further said that it has been severely affected by the prolonged decline in the price of bitcoin, the increase in electricity costs, the increase in the hash rate of the global bitcoin network and the dispute with Celsius.

Price Action: At the time of writing, BTC was trading at $1,213 down 3.36%. CORZ was trading at $0.20, up 3.07%, on Tuesday, according to Benzinga Pro.

Read next: Bitcoin, Ethereum, Dogecoin Spike After Bank of Japan Pivot: Trader Says Could Be ‘Massive’ Trigger for Relief Run

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