Bitmain, a leading cryptocurrency mining hardware manufacturer, and Core Scientific, a once-bankrupt crypto mining firm, have reached an agreement to bolster their mining facilities through a combination of equity and cash transactions.
The finalized deal, which was completed in August, revolves around Bitmain supplying 27,000 Bitcoin mining rigs to Core Scientific. This hardware, valued at $23 million in cash, will be accompanied by an infusion of $53.9 million worth of common stock of the previously troubled Core Scientific. This collaboration also includes a fresh hosting arrangement aimed at supporting Bitmain’s mining operations.
Bitmain’s intention to trade mining hardware for both cash and equity was initially revealed in a court filing as part of Core Scientific’s broader restructuring plan. This restructuring plan also involved participation from Anchorage, BlockFi, and Mass Mutual Asset Finance. Interestingly, all but Anchorage opted for a combination of cash and equity to address their claims.
Bitmain’s expansion plan begins in Q4 2023 pending judicial approval. They’ll add 4.1 exahashes to Core Scientific’s hash rate. Furthermore, the two crypto mining giants have committed to a collaborative effort aimed at upgrading Bitmain’s last-generation miners currently hosted at Core Scientific’s data centers, thereby boosting the overall productivity of the firm.
Core Scientific faced challenges and filed for Chapter 11 bankruptcy in December 2022, citing crypto market volatility and declining Bitcoin prices as key factors in their financial troubles.
Earlier we saw such a partnership in the mining sector on May 2023, between Bitdeer and Bhutan’s Druk Holding and Investments (DHI) partnered for eco-friendly digital asset mining in Bhutan, creating a $500 million fund and attracting global investments. They utilized Bhutan’s clean energy for blockchain tech, promoting sustainability and contributing to Bhutan’s economic growth, as reported by Todayq News.
But this recent partnership between Bitmain and Core Scientific is not only evidence of the strength of the cryptocurrency mining industry but also underscores the strategic importance of consolidation and innovation in this rapidly evolving sector. With their shared vision for growth and adaptability, these two industry giants are balanced to make significant strides in the world of cryptocurrency mining, solidifying their positions as leaders in the field.