Bankrupt Bitcoin Miner Raises $500M from BlackRock
- Bitcoin miner Core Scientific raised $500 million BlackRock, Apollo Capital, Kensico Capital, Ibex Investors, and others.
- The $500 million were lent to Core Scientific by the high profile investors when they purchased Core Scientific’s secured convertible notes.
- Ibex Investors lent the biggest share of money, i.e., around $100 million while BlackRock lent close to $38 million.
- Core Scientific continues to mine BTC despite filing for bankruptcy in 2022 and mined 1,435 BTC in December.
Bitcoin miners have found themselves in significant trouble following the collapse of the Terra ecosystem, which led to the implosion of many crypto firms, causing Bitcoin (BTC), the world’s largest crypto coin, to drop significantly in 2022. Due to a decline in the demand for BTC and a price crash, miners like Core Scientific were pushed to file for bankruptcy.
However, Core Scientific is not interested in selling its assets at a significant discount to its competitors, and as a result, it has raised $500 million from BlackRock, the world’s largest asset management company with more than $10 trillion in assets under management (AUM).
As per a court filing seen by Bloomberg, along with BlackRock, Apollo Capital, Kensico Capital, Ibex Investors, and others, they are also involved in providing funding to the Bitcoin miner. However, the investment has come at a time when institutional involvement in cryptocurrencies have dropped significantly due to the fear created by the collapse of FTX.
The report confirms that the $500 million were lent to Core Scientific by BlackRock and other high profile investors when they purchased the Bitcoin miner’s secured convertible notes, a debt security that contains an option in which the note will be converted into a predefined amount of Core Scientific’s shares. Another important fact to note here is that Ibex Investors lent the biggest share of money, i.e., around $100 million.
On the other hand, BlackRock bought around $38 million worth of convertible notes from the Bitcoin miner, while Apollo Capital Management bought notes worth $22.6 million and $11 million in April and August, respectively. Moreover, these two asset management companies contributed $17 million and $6 million, respectively, to Core Scientific’s debtor-in-possession loan, which allowed the company to function despite filing for bankruptcy.
Interestingly, Core Scientific is one of the largest and few Bitcoin mining companies to be publicly listed in the US. However, the shares of the company have tumbled heavily due to the volatility of BTC and the company’s bankruptcy filing. At the time of publication, the price of 1 CORZQ share stands at around $0.11, and the market cap of the company stands at $41 million. Interestingly, a month ago, the price of 1 share of the Bitcoin miner was $0.05.
After its listing on NASDAQ, the company breached the $1 billion market cap and is now worth just a fraction of that. However, Core Scientific has nevertheless continued to mine cryptocurrencies, and as reported earlier by Bitcoin Wisdom, the company sold $1,975 BTC for $44 million in mid-2022.
Moreover, the company also mined 1,435 BTC in December, while its November production was 1,356 BTC. The self-mining hashrate of the Bitcoin miner increased from 15.4 EH/s to 15.7 EH/s as well. In early 2022, the company also signed a $100 million Common Stock Purchase Agreement with investment bank B. Riley.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
