Core Scientific Finalizes $77 Million Agreement With Bitmain for Acquisition of 27,000 Bitcoin Mining Rigs

Bitmain, a Bitcoin and cryptocurrency mining hardware maker, and the bankrupt mining company Core Scientific have come to an agreement with a combination of equity and cash to finalize their deal for expanding mining infrastructure.

This deal between the two mining giants includes Bitmain providing 27,000 Bitcoin mining machines in exchange for $23 million in cash, and $53.9 million in Core Scientific's common stock. 

Beyond this hardware procurement agreement, Bitmain and Core Scientific have entered into a new hosting arrangement to support Bitmain's mining operations.

The agreement reached its conclusion in August. A court document revealed that Bitmain's strategy involved trading mining equipment for cash and shares as an element of Core Scientific's restructuring strategy. 

This plan also involved other entities like Anchorage, BlockFi, and MassMutual Asset Finance. Except for Anchorage, the rest chose a combination of cash and stock to settle their claims.

Bitmain's plan for expansion and investment is set to be implemented by the fourth quarter of 2023, subject to a judge's approval. 

Once greenlit, this hardware is projected to increase Core Scientific's hash rate by 4.1 exahashes. 

Additionally, the two mining entities have agreed to upgrade the older-generation Bitmain miners located at Core Scientific's data centers, aiming to boost the company's operational efficiency.

In December 2022, Core Scientific declared Chapter 11 bankruptcy, attributing its decision to the financial downturn and the dropping value of Bitcoin. The challenges began surfacing for the company in the preceding weeks to its eventual downfall, spurred by market instability.