Public BTC mining companies face $4B in liabilities, Core Scientific leads the pack

Public Bitcoin (BTC) mining companies have a combined debt of over $4 billion, according to the Hashrate Index.

With the most debt, Core Scientific had about $1.3 billion in debt on September 30th. company statement.

The BTC mining industry has seen significant volatility during this bear market, and the recent bankruptcy of Core Scientific is a testament to the sector’s volatility.

Despite being the largest public BTC miner by hashrate, Core Scientific has been struggling with debt for months and has failed to make its monthly debt payments, according to the Hashrate Index.

WARNING: You must wear a helmet

Core Scientific isn’t the only public miner struggling with debt. Marathon, the second largest debtor, owes $851 million, mostly in the form of convertible bonds that give holders the option to convert into stock.

Greenidge, the third largest debtor, owes $218 million and is in the process of restructuring to reduce its debt.

deep debt

A look at the debt-to-equity ratio, a measure of how much a company owes relative to its equity, reveals that many public miners have very high levels of debt.

Luxor analyst, Jalan Mereldgenerally stated:

“A debt-to-equity ratio of 2 or higher is considered risky, but in the volatile bitcoin mining industry, it should be significantly lower. We can see that there are many public miners with ratios.”

Core Scientific has the highest ratio at 26.7, followed by Greenidge at 18 and Stronghold at 11.1.

Argo is in fourth place with a ratio of 5.3, and after accidentally revealing plans for bankruptcy, Mellerud said it “will sell some of its assets, execute capital financing transactions to reduce its debt, We are negotiating to improve liquidity.”

“The unsustainable high level of debt in the industry will continue to drive more restructuring and possibly even bankruptcies.