The problem of these companies is loans, not mining bitcoins. The loans have a repayment period, and when the repayment period comes, you will find that the company needs a lot of liquidity, either to pay the electricity or workers expenses, or to pay off the loans, and therefore it resorts to selling part of the bitcoins to cover that.
When the lender knows about the company’s situation and their need for liquidity, the bitcoins are sold at a large discount far from the current trading price, so it is an additional loss for them.
The impact of the Bitcoin price is not significant in the short term as they have additional variables such as mining difficulty, energy prices, depreciation and competition for Bitcoin mining.
The bankruptcy filing is to reschedule the debt on better terms.
it was more of mitigating actual losses before needing to sell coins. by forcing an issue to extend their operations hoping to break even by the time they exit banktruptcyWhen the lender knows about the company’s situation and their need for liquidity, the bitcoins are sold at a large discount far from the current trading price, so it is an additional loss for them.
The impact of the Bitcoin price is not significant in the short term as they have additional variables such as mining difficulty, energy prices, depreciation and competition for Bitcoin mining.
The bankruptcy filing is to reschedule the debt on better terms.
more precisely:
CS went into bankruptcy in december because a firm that gave CS asics had a deal whereby the firm would pay the supply of CS electric in return of bitcoin rewards. (thus the private firm pre-bought hardware and paying the electric making them the creditors)
due to market price corrections(new lows) the firm received less value than expected(not enough to pay the electric and break even). thus the firm didnt pay as much electric for CS to use. so CS stopped paying out rewards in october as a counter reaction.. holding the equipment hostage.
then CS filed for bankruptcy in december to legally hold onto the equipment for atleast another 6 months(should have ended june 2023) while auditors done their thing under bankruptcy rules.
recently the judge ordered CS to hand over $20m worth of asics back to the firm and then allowed an extension until september2023 to sort out the rest of the deal to exit bankruptcy
