• Core Scientific has shut down 37,000 mining rigs that were hosted for Celsius, leading to a jump in the share price of the Bitcoin miner by 81%.
• Core Scientific had to take the decision as they were losing out on $2 million per month in hosting the rigs.
• The decision is expected to ease the financial burden of the company by bringing in an additional $2 million per month in revenue.
Core Scientific, the Bitcoin miner, has made a drastic decision to rearrange their operations in order to ease the pressure on their finances. On 3 January, the company decided to shut down 37,000 mining rigs that were being hosted for Celsius. This move comes a week after the miner had moved court on 28 December 2022 to reject the contracts signed with Celsius‘ mining arm.
The move is expected to provide a much-needed financial boost to the company as it was unable to shoulder the burden of Celsius‘ unpaid power costs. It was estimated that the hosting of the rigs was costing the miner around $2 million per month. This led to the filing of a revised version of a proposed order in the U.S Bankruptcy Court for the Southern District of Texas, where Celsius Network agreed to let Core Scientific shut down the rigs.
The decision is expected to generate $2 million per month in revenue for the Bitcoin miner. This figure was derived by taking into account the revenue that another client could bring in, or by using the space for hosting its own machines. This could potentially ease the financial burden of the miner, who was losing out on $28,000 in power costs daily.
The news of this decision has had a positive effect on the share price of the Bitcoin miner, as it has jumped over 81%. This is despite the fact that 2022 was a rough year for Bitcoin mining. Rising energy costs, paired with a massive drop in the price of Bitcoin, had left many miners struggling.
Core Scientific’s decision to shut down the rigs could be a much-needed lifeline for the company. It remains to be seen if the move will be enough to help the miner weather the storm, or if they will have to make further changes in order to stay afloat.