In the midst of a protracted bear market, concerns have been raised about the general health of the bitcoin mining community following the recent bankruptcy filing of bitcoin miner Core Scientific despite a $72 million relief offer from creditors, as reported by Cointelegraph.
It turns out that the public bitcoin miners have liabilities totaling more than $4 billion and need to restructure to escape their unsustainable high debt levels immediately.
According to Cointelegraph, during the bull market of 2021, the Bitcoin mining industry took on a sizable amount of debt, which had a negative effect on their bottom lines during the following bear market. The top 10 Bitcoin mining debtors collectively owe more than $2.6 billion, according to data analytics by Hashrate Index.
Cointelegraph further noted that most Bitcoin miners, including Greenidge, the third-largest debtor, are restructuring to pay off debt. The debt-to-equity ratio of publicly traded bitcoin mining companies reveals a high risk for the sector. According to Hashrate Index, most industries view a debt-to-equity ratio of 2 or higher as risky.
(With insights from Cointelegraph)