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Lenders own 50% of Core’s self-mining hashrate

Here’s a breakdown of who owns which share of the bankrupted miner

A creditor presentation deck that somewhat went unnoticed in Core Scientific’s bankruptcy news this week shows that for the first time, Core has provided a breakdown about which lender has financed how much of its self-mining fleet.

In November, Core’s realized self-mining hashrate reached 12.8 EH/s, which accounted for 85% of its installed capacity of 15 EH/s. It has another 3 EH/s pending delivery and deployment through April 2023. It turns out that about 9 EH/s of the total 18 EH/s is collateralized against equipment loans Core borrowed from six lenders. Below is a line item breakdown.

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Dividing the principal outstanding over the corresponding collateralized hashrate gives each loan the implied nominal collateral value. Due to the ASIC price slump this year, the fair market value of those collaterals is down so much that the lenders might as well just let Core keep the miners running for the time being.

NYDIG is in a relatively better position because it gave loans in the first half of 2021 when bitcoin’s price was not too high. Below is a visualization of each miner financing loan that Core Scientific took during the bull market. It raised a total of $366 million from the six creditors and half of that happened in December 2021 alone around the peak of the market rally.

Earlier this year, Core’s management team said in an earning call that they expected the all-in energy price across its facilities to be around $0.04 per kWh in 2022. In reality, the prices spiked to more than $0.075 per kWh during the summer due to the lack of a fixed power pricing structure to hedge the volatility, according to the creditor presentation deck. 

Core now expects its energy prices to come down through 2023 on account of i) declining natural gas prices and ii) greater megawatt utilization in Texas. 

Per its power and facility breakdown, Core’s biggest operational capacity is in Texas, which is followed by Georgia. But the current utility agreements for one site in North Carolina and two sites in Georgia – totaling 264 MW – expires in December 2022. It would be interesting to see if anything changes on that front after the new year.

If Core successfully expands the Denton site in Texas by another 172 MW next year, which is estimated to incur another $42 million in investment, then it will have 44% of its footprint in the lone star state, up from 33% at the moment. 

Here’s the creditor presentation deck if you want to see how Core forecasts its cash flow in the coming months. One thing is for sure: no more hodling as “all BTCs produced [are] assumed to be sold soon after mining.” And Core’s self-mining capacity produces 50 BTC per day on average at the moment.