Bitcoin Miner Core Scientific To Go Public At $4 Billion Valuation As U.S. Crypto Mining Gains Steam On China Crackdown

Bitcoin Miner Core Scientific To Go Public At $4 Billion Valuation As U.S. Crypto Mining Gains Steam On China Crackdown

Topline

Core Scientific, one of the largest cryptocurrency miners in the United States, announced Wednesday it plans to list on the Nasdaq exchange in a deal that values the four-year-old company at $4.3 billion—the latest sign the nation's growing prominence as a bitcoin mining hub should only rise as longtime market leader China continues cracking down on the space.

Key Facts

As part of the deal, which is still subject to shareholder approval, Core will merge into special-purpose acquisition company Power & Digital Infrastructure and receive about $345 million to invest in additional equipment and infrastructure.

The Georgia-based company, which also sells blockchain software and hardware, revealed it expects total revenue of $493 million and adjusted earnings of $203 million this year, followed by revenues of $1.1 billion and earnings of nearly $600 million in 2022.

Core mined 1,683 bitcoins, currently worth about $53 million, in the first half of the year out of facilities in Georgia, Kentucky and North Carolina; a fourth warehouse is under construction in North Dakota.

Existing shareholders are expected to retain all their existing equity, totaling about 89%, in the combined company.

Earlier Wednesday, Argo Blockchain, another cryptocurrency miner that already trades on the London Stock Exchange, also announced plans to begin trading in the U.S., saying it's filed a confidential prospectus with the Securities and Exchange Commission for a proposed listing.

Key Background

The U.S. has quickly become the second-biggest bitcoin mining hub in the world. According to Cambridge University data, nearly 17% of all bitcoin mining in the world happens in the U.S., about three times more than its share just one year ago. Meanwhile, China's share has plummeted to 45% from as high as 80%. That figure's only expected to fall as more provinces announce sweeping plans to ban crypto mining to curb environmental risks. Last week, China’s Anhui province became the latest region blocking the practice to help ease expected power shortages.

Crucial Quote

“For the last 18 months, we’ve had a serious growth of mining infrastructure in the U.S.,” said Darin Feinstein, the founder of Core Scientific. “We’ve noticed a massive uptick in mining operations looking to relocate to North America, mostly in the U.S.”

Tangent

Billionaire Michael Saylor, the longtime executive of data analytics company MicroStrategy, praised the Core and Argo listings in tweets Wednesday, saying publicly traded bitcoin miners will bring "financial capital, engineered facilities and credibility" to the global cryptocurrency network and "enhance bitcoin as an institutional asset." MicroStrategy owns about 92,079 bitcoins worth more than $3.2 billion as of Wednesday, making it the corporation with the biggest bitcoin investment in the world.

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