Wed Aug 28, 2024 ▪
3
min read ▪ by
Another blow to the Bitcoin mining industry. Rhodium Enterprises has just declared bankruptcy in Texas, revealing debts that could reach $100 million. This announcement comes in a difficult context for miners, between falling prices and rising energy costs.
Bitcoin miner Rhodium files for bankruptcy in Texas
The Bitcoin mining sector suffers a new blow: 2 years after the bankruptcy of Core Scientific, another company follows the same path.
Rhodium Enterprises, a company specializing in bitcoin mining, has filed for voluntary Chapter 11 bankruptcy in the bankruptcy court for the Southern District of Texas. The filing reveals estimated liabilities of between $50 million and $100 million, while total assets are estimated to be between $100 million and $500 million.
This step includes six of the company’s subsidiaries, including Rhodium Encore and Rhodium 2.0. The bankruptcy follows the company’s failure to repay a $54 million loan last July.
Despite two restructuring proposals, disagreements between the stakeholders precipitated the default. This procedure will allow Rhodium to reorganize its debts while maintaining its activities.
A sector under pressure
Rhodium’s bankruptcy illustrates the growing difficulties of Bitcoin miners. According to a recent report by JPMorgan, their profits have fallen sharply following the April halving, which halved bitcoin rewards. At the same time, rising electricity prices are weighing heavily on their margins.
Other major players have already gone through the same thing. Core Scientific, one of the largest US miners, filed for bankruptcy in late 2022 before restructuring in early 2024. The sector is facing a deep crisis, caught between Bitcoin volatility and operating cost inflation.
Paradoxically, this bankruptcy occurs at the same time as Texas, the epicenter of mining in the United States, is multiplying initiatives to support the industry. In August 2023, the state passed a law granting tax breaks to miners who use flared gas as an energy source.
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Passionate about Bitcoin, I love exploring the intricate details of blockchain and cryptocurrencies and share my discoveries with the community. My dream is to live in a world where privacy and financial freedom are guaranteed for everyone, and I firmly believe that Bitcoin is the tool that can make this possible.
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