Miner Weekly: Here’s how much Core Scientific owes to whom

Oct 29, 2022

The firm had $880 million in notes payable as of June 30

Core Scientific made headlines this week with an SEC filing where it described its recent operational pains. We summarized the key takeaways in this Twitter thread. Since Core Scientific is the largest public mining company and its production growth has significantly relied on debt financing, we want to provide further color on the breakdown of its notes payables.

Core’s total notes payable increased from $692m on Dec. 31 to $770m on Mar. 31 and to $880m on Jun. 30. The majority of its loan payables came from the convertible notes it issued in early 2021 while the remaining amounts were split among lenders in the TradFi and crypto space.

Meanwhile, Core incurred net expenses of $21m and $27m in Q1’22 and Q2’22, respectively. Given its loan interest rates and $880m of outstanding notes, we estimate that Core’s net interest expenses for Q3 and Q4 would be around similar levels, if not higher. Because the worth of Core’s cash and digital assets shrunk to $27m as of Oct 26, there’s little doubt about Core's inability to meet debt obligations, not to mention the rising cost of production and cash-based compensations.

In short, bitcoin’s historically low hashprice and rising energy prices weigh heavily on the world’s largest public bitcoin mining operation. Should it fail to turn things around, this would cause a ripple effect on the industry given that Core hosts about 9 EH/s of hashrate for third-party customers. But this could also mean potential opportunities for others. After all, Core had 4.37% of the market share according to its bitcoin production last month. From January to September, Core mined 4.09% of the total bitcoin rewards up for grabs, including block subsidies and transaction fees.