Contagion engulfs Bitcoin miners as bear market continues

Never underestimate how quickly things can deteriorate in a volatile industry like cryptocurrencies, especially in a bear market. Prices can always drop in winter crypto vaults and casualties can multiply overnight. 2022 has been a year of endless contagion; with everyone focused on Binance, high-profile Bitcoin (BTC) miners were failing.

This week, mining company Core Scientific filed for Chapter 11 bankruptcy. Greenridge, another miner, received a $74 million debt restructuring lifeline 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 isn’t all bad 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 greater flexibility in dealing with market conditions.

This week’s Crypto Biz looks at Core Scientific’s financial woes, FTX’s recovery warning, Celsius’s potential bidder pool, and Visa’s latest intellectual foray into cryptocurrencies.

Bitcoin miner Core Scientific has reportedly filed for Chapter 11 bankruptcy

The cryptocurrency contagion has spread to the Bitcoin mining industry, with miner Core Scientific reportedly filing for Chapter 11 bankruptcy in Texas. The news came just days after a lender offered Core Scientific $72 million to help shore up its finances in the bear market. That deal didn’t 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 pursuing various means to hedge their operations during an extended bear market.

FTX warns it will recover donations and political contributions

Just when you think you’ve heard everything you need to hear about Sam Bankman-Fried and FTX, new developments emerge. This week, the bankrupt cryptocurrency exchange warned that anyone receiving donations or political contributions from SBF or other FTX executives could recover those funds as part of a fund recovery process. This may have been triggered by some Democratic beneficiaries stepping forward and pledging to return the now tainted funds. Do you know who else has received campaign donations from SBF? Biden’s 2020 campaign. So far, the president hasn’t 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 monitoring.

Celsius racks up 30 potential bidders for its assets, withdraw motion approved

Bankrupt crypto lender Celsius has amassed a long list of potential buyers for its remaining assets, prompting cautious optimism that it would be able to sell its retail platform and mining assets at a competitive price. Since September, more than 125 parties have been contacted and 30 potential bidders have emerged. Celsius’s latest filing, part of its bankruptcy proceedings, suggested the company’s valuation was $2.6 billion as of Nov. 25. The company has a $1.2 billion hole in its balance sheet. In other words, there’s $5.5 billion owed to users versus just $4.3 billion in assets.

Visa envisions plans to have your bills automatically paid from your crypto wallet

Despite all the fear, uncertainty and doubt plaguing the cryptocurrency market, we can always rely on Visa for positive reinforcement. The crypto-friendly credit card giant recently proposed a business solution to streamline digital asset payments. While still in the thought-experiment stage, Visa envisions an autopay feature that allows cryptocurrency users to withdraw funds directly from their Ethereum-powered self-custodial wallets. They can then use these funds to make automatic payments on their phone bills, Netflix subscriptions, and other recurring charges. It’s a highly technical proposition, but we’ve dissected it in layman’s terms to give you the full scoop.

Before You Go: Is Binance Insolvent or Is It Just FUD?

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

Crypto Biz is your weekly boost of the business behind blockchain and crypto delivered straight to your inbox every Thursday.