Core Scientific, Marathon, and Greenridge Generation are the top debtors among public US bitcoin miners, who jointly owe nearly $4 billion, according to information from Hashrate Index.
With liabilities of $1.3 billion as of September 30, Core Scientific is the largest debtor, per the data. The miner just declared bankruptcy, and tens of millions of dollars must be paid each month to cover its debt due to its high debt burden.
As a result, even though the business had a positive cash flow, it could not pay its debts due to the decline in the value of bitcoin. The decision to declare bankruptcy was made as a result.
BTC Mining By Public Miners Makes Up 15%
Furthermore, Core Scientific has the greatest hashrate among open-source miners. In 2022, Core Scientific was responsible for 25% of the public miners’ 15% share of the total Bitcoin mining, demonstrating how difficult a year it has been for miners.
15% of all bitcoin mined in 2022 was generated by publicly traded companies. Core Scientific, which just filed for bankruptcy, accounted for a quarter of that.
With $851 million in debt, Marathon is the second-largest creditor. Thankfully, most of its loans are convertible notes that don’t call for regular service payments. As a result, it is no longer in danger of going bankrupt.
Greenridge Generation, the third-largest debtor, is less fortunate. With a $218 million debt, it is in danger of going bankrupt. It is working on finishing a financial restructuring agreement that will lower its debt and cause it to surrender most of its hash power to NYDIG.
The top 10 also include public miners Terawulf, Norther Data, Argo, BitNile, Stronghold, Iris Energy, and Bitfarms. They all owe more than $100 million in debt.
Miners Frequently Have High Debt-To-Equity Ratios
The debt-to-equity ratio, not the debt itself, is the most significant issue for public miners. In general, a dangerous debt-to-equity ratio is two or above, which should be lower considering the instability of the cryptocurrency industry.
The majority of public miners, however, have a much larger debt-to-equity ratio. Ratios for Core Scientific are 26.7, Greenridge is 18.0, Stronghold is 11.1, Argo is 8.7, and Cathedra is 5.3. The debt-to-equity ratio for over half of the 25 active bitcoin miners is greater than 2.
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Public mining debt is $4 billion, while equity is $2.2 billion. The sector as a whole has a high debt-to-equity ratio of 1.8. The future still appears bleak, although many miners are attempting to restructure debt.
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