Markets

Contagion engulfs Bitcoin miners as bear market continues

Never underestimate how quickly things can turn sour in a sector as volatile as crypto, especially in a bear market. Prices can always fall in crypto winter and victims can multiply overnight. 2022 was the year of endless contagion; with everyone focused on Binance, high-profile Bitcoin (BTC) miners failed.

This week, mining company Core Scientific filed for Chapter 11 bankruptcy. Greenridge, another miner, received a $74 million debt restructuring bailout from New York Digital Investment Group. Bitcoin is the most valuable commodity in a bear market, but miners need to keep the lights on.

The news is not all negative on the mining front. This week, German miner Northern Data reported that it expects to generate up to $206 million in revenue from its mining operations this year. It also has no financial debt on its books, which gives it more flexibility in dealing with market conditions.

This week’s Crypto Biz dissects Core Scientific’s financial woes, FTX’s retracement warning, Celsius’ pool of potential bidders and Visa’s latest intellectual foray into cryptocurrencies.

Bitcoin miner Core Scientific has reportedly filed for Chapter 11 bankruptcy

The crypto contagion has spread to the Bitcoin mining industry, with miner Core Scientific reportedly filing for Chapter 11 bankruptcy in Texas. The news comes just days after a creditor offered Core Scientific $72 million to help shore up its finances amid a bear market. That deal did not go through. However, Core is said to continue its mining operations and has no plans to liquidate its remaining BTC. The company was forced to offload 9,618 BTC in April to stay operational. Other Bitcoin miners are also feeling the pinch and are looking for different ways to protect their operations during the extended bear market.

FTKS warns that it will return political donations and contributions

Just when you think you’ve heard everything you need to hear about Sam Bankman-Fried and FTKS, new developments emerge. This week, the bankrupt crypto exchange warned that anyone who received political donations or contributions from SBF or other FTKS executives could get those funds back as part of the refund process. This may have been caused by some Democratic recipients coming forward and promising to return the now tainted funds. Do you know who else has received campaign donations from SBF? Biden’s 2020 election campaign So far, the president has not signaled whether he will return the $5.2 million in donations SBF made to his campaign during the 2020 presidential election, but that could change. This is a story worth following.

Celsius collects 30 potential bidders for its property, motion to withdraw approved

Bankrupt crypto lender Celsius has assembled a long list of potential buyers for its remaining assets, raising cautious optimism that it will be able to sell its retail platform and mining operations at a competitive price. Since September, more than 125 parties have been contacted and 30 potential bidders have appeared. Celsius’ most recent filing, part of bankruptcy proceedings, suggested the company’s Nov. 25 valuation was $2.6 billion. The company has a $1.2 billion hole in its balance sheet. In other words, users are owed $5.5 billion against only $4.3 billion in assets.

Visa is coming up with plans to let you pay your bills automatically from your crypto wallet

Despite the fear, uncertainty and doubt plaguing the cryptocurrency market, we can always count on Visa for positive reinforcement. The crypto-friendly credit card giant recently proposed a business solution to simplify digital asset payments. While still in the thought-experiment stage, Visa envisions an automatic payment feature that allows cryptocurrency users to withdraw funds directly from their Ethereum-powered wallets. They can then use these funds to automatically pay their phone bills, Netflix subscriptions, and other ongoing expenses. It’s a very technical proposition, but we’ve dissected it in layman’s terms to give you the full picture.

Before You Go: Is Binance Insolvent or Just FUD?

How far will the crypto contagion spread? As centralized platforms fall by the wayside, culminating in the collapse of FTX in November, more and more people are turning their attention to Binance. Justified or not, Binance has been at the center of controversy due to concerns about its financial health and rumors that the exchange will become the target of a US money laundering lawsuit. In this week’s market report, I sat down with Marcel Pechmann and Joe Hall to discuss any merits for Binance FUD. You can watch the full replay below.

https://vvv.youtube.com/vatch?v=tD9VgdkDjss

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