The shares of Bitcoin (BTC) mining company Core Scientific have increased by around 243% following the announcement from one of its key creditors, B. Riley Financial, that fresh funds would be proposed to help the company avoid bankruptcy on December 14.
Data from Tradingview shows that CORZ was trading at $0.46 earlier today. The stock market lost 95% of its value in a single year, although there are currently signs of a slight rebound.
As Tronweekly reported, Diversified financial services provider B. Riley Financial has sent an open letter to its shareholders and lenders. The financial company has collaborated with the Bitcoin mining company to restructure its debt and provide liquidity.
To do this, B. Riley has offered to provide the mining firm with $72 million in funds on highly favorable conditions for a considerable amount of time.
The finance agreement’s provisions state that there are no contingencies and that it is ready to invest the first $40 million.
Additionally, the financial company stated that the Bitcoin miner firm would have to stop making any payments to lenders for equipment as long as the Bitcoin price is below $18,500 before receiving the remaining $32 million.
Bitcoin Miner’s Financial Brink After FTX Collapse
On November 22th, Bitcoin miner Core Scientific revealed in a quarterly report that it lacked sufficient capital to last until 2023. It also stated that it had concerns about its capacity to generate cash through finance or the capital market. Additionally, it had researched strategic alternatives, and all available options, including bankruptcy, had been considered.
FINANCIAL TIMES reported today that:
Hedge funds have been upping their short positions against shares of cryptocurrency miners, betting that more will go to the financial brink after the collapse of the FTX exchange.
Hedge funds, which are a group of private investors, believe that some businesses might not be able to sustain their operations given that the price of bitcoin has decreased substantially this year. The cost of running electricity-dependent machines has also risen accordingly.
The collapse of Sam Bankman Fried’s FTX, according to bearish investors, would worsen the situation for a segment of the cryptocurrency market that grew quickly last year, frequently with borrowed funds, with the intention of profiting from the high values of tokens like Bitcoin.