Bitcoin mining firm Core Scientific is going public via SPAC in a $4.3 billion deal

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  • Crypto mining firm Core Scientific is going public via a SPAC in a deal that values the combined entity at $4.3 billion.
  • The mining firm will merge with Power and Digital Infrastructure Acquisition Company.
  • Core Scientific operates proprietary mining facilities and hosts digital asset mining hardware for customers.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Core Scientific, one of North America’s largest crypto miners, is going public via a SPAC merger in a deal that values the combined entity at $4.3 billion, the firm said in a Wednesday announcement.

The mining firm will merge with Power and Digital Infrastructure Acquisition Company, whose anchor investor is BlackRock. Following the transaction, the combined company will operate as Core Scientific and trade on the Nasdaq exchange.

Core Scientific owns four US facilities where it operates proprietary mining facilities and hosts bitcoin and other digital asset mining hardware for customers. The company said it operates with 100% net carbon neutrality through using clean energy inputs and purchasing renewable energy credits.

The proceeds from the SPAC merger are expected to fund mining equipment purchases of and infrastructure build out.

The firm mined 755 bitcoin in the first quarter of 2021. Publicly traded competitor Marathon Digital Holding’s mining fleet produced 196 newly minted bitcoins during the same period. Core Scientific also estimates it will boast a mining capacity of 510 megawatts by the end of the year through its four facilities.

For the first half of 2021, Core Scientific has mined 1,683 bitcoins total.

The merger is expected to be completed in the fourth quarter of 2021. Shares of Power and Digital Infrastructure Acquisition Company have jumped as high as 2% since the close Tuesday before the transaction was announced.

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Bitcoin edges lower for its worst weekly performance in over a month as as cryptocurrencies struggle to recover from heavy sell-off

Representations of virtual currency bitcoin are placed on US dollar banknotes taken May 26, 2020.
Representations of virtual currency bitcoin are placed on US dollar banknotes taken May 26, 2020.

Bitcoin slipped Friday to clock worst weekly performance in more than a month as the world’s largest cryptocurrency by market cap inches closer to a key support level of $30,000.

Bitcoin on Friday morning was trading at $31,363 as of 8:30 a.m. ET, according to data from CoinMarketCap.

An eventual break below this level will be crucial, Julius de Kempenaer, senior technical analyst at StockCharts.com, told Insider.

“If and when this happens, $20,000 is on the cards as the next level of support to watch,” said.

The selling pressures began on Thursday when the digital asset suffered its biggest drop in about 10 days. Bitcoin in the past month has been trading in a range at just around half its April peak price of nearly $65,000.

Alongside bitcoin, other cryptocurrencies have slid in the last 24 hours:

Cryptocurrencies have struggled to rebound from a massive crash in May when the value of the total market dropped by nearly half in just seven days.

A number of headwinds have been blowing against the crypto market since the brutal sell-off.

Federal Reserve Chair Jerome Powell on Thursday told the Senate Banking Committee that cryptocurrencies have failed to become a viable payment method. A day earlier, he also said the US won’t need stablecoins and cryptocurrencies if the central bank were to issue its own digital currency.

There have also been problems plaguing the the world’s largest cryptocurrency exchange, Binance, which is weathering an intensifying regulatory crackdown. Italy most recently joined a growing list of nations to issue a warning against the exchange, saying it is not authorized to do business in the country.

Bitcoin is also under increasing fire for its impact on the environment from critics who points to the heavy energy consumption of bitcoin mining.

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A controversial bitcoin mining operation has made a New York lake ‘so warm you feel like you’re in a hot tub’

Seneca Lake boathouse at dusk
Greenidge is allowed to take in 139 million gallons of water and discharge 135 million gallons daily, which local residents say is heating up Seneca Lake.

  • Local residents say a power plant is heating Seneca Lake and emitting huge amounts of greenhouse gases.
  • The gas-fired plant is used to power at least 8,000 computers that are mining bitcoin.
  • The plant’s CEO says it’s operating within the law, and has created 31 jobs.
  • See more stories on Insider’s business page.

Local residents have blamed bitcoin mining for heating up the largest of the Finger Lakes in upstate New York, with one saying it’s “so warm you feel like you’re in a hot tub,” according to a report by NBC News.

Their complaints centre on a gas-fired power plant that’s being used to power at least 8,000 bitcoin mining computers. The plant draws water from Seneca Lake for cooling, then discharges the warmed water back into the lake.

Bitcoin mining is the process by which new bitcoins are created. The mining is done by specialised computers that solve complex calculations on behalf of the bitcoin network.

The power plant, Greenidge, which is being closely monitored by the Department of Environmental Conservation, is allowed to suck in 139 million gallons of water and discharge 135 million gallons daily. The discharged water can be as hot as 108 degrees in the summer and 86 degrees in winter, per permit documents viewed by NBC News.

“The lake is so warm you feel like you’re in a hot tub,” said Abi Buddington, who lives near the plant.

Read more: Riot Blockchain’s CEO and 2 top crypto experts break down the impact of China’s bitcoin mining ban on investors and miners – and detail 3 reasons why they remain bullish on the digital asset

Private-equity firm Atlas Holdings bought the disused coal-powered site next to Seneca Lake, the largest of the Finger Lakes, in 2014, and reopened it as a natural gas plant in 2017.

At first the plant only generated energy for the grid when demand was high, but in 2019 Greenidge started using the plant to power bitcoin mining to make higher profits from surplus energy.

Bitcoin mining on computers uses huge amounts of energy. Last month Sen. Elizabeth Warren called for a crackdown on cryptocurrencies to fight the climate crisis.

Greenidge has at least 8,000 computers and is considering installing more as it plans to ramp up its bitcoin mining capacity to 45 megawatts by December, per NBC News’ report.

But this is leading to a huge spike in emissions. Regulatory documents viewed by environmental campaign group Earth Justice show that its carbon dioxide equivalent emissions and nitrous oxide emissions each grew nearly tenfold between January and December 2020 as it ramped up bitcoin mining.

Judith Enck, a former Environmental Protection Agency regional administrator, said that New York wouldn’t meet its greenhouse gas emission reduction goals if Greenidge continued mining bitcoin.

Greenidge CEO Jeff Kirt told NBC News that “the environmental impact of the plant has never been better than it is right now,” and that the facility was operating within its environmental permits. Greenidge said that it would make its operations carbon neutral by buying credits to offset its emissions.

Kirt told CNBC News that the plant has created 31 jobs. It has also donated $25,000 to the Dresden Fire Department and $20,000 to the school district, the outlet reported, and paid $272,000 to local authorities in lieu of real property taxes last year, according to an economic study commissioned by Greenidge.

But Peter Mantius, who writes a blog about local environmental politics, said that Greenidge pays “a fraction, maybe a quarter” of what the old owner paid because of a favorable tax assessment arrangement.

Greenidge’s air permit is up for renewal in September, Mandy DeRoche, deputy managing attorney in the coal program at Earth Justice, told NBC News.

“We’ve asked the Department of Environmental Conservation to take a hard look and think about it as a new permit, not just a renewal,” she said.

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A key measure of the health of the bitcoin network has tumbled 50% from its peak in May following China’s crypto crackdown

bitcoin mining servers
Bitcoin mining computer servers are seen in Bitminer Factory in Florence

  • The hash rate of bitcoin has dropped 50% from its peak its May, according to data from The Block.
  • The hash rate is at the lowest level since May 2020, and has notched the largest drop in history.
  • On May 14, the hash rate fell from 180 EH/s to its current value of 90 EH/s.
  • See more stories on Insider’s business page.

The hash rate of bitcoin has dropped 50% from its peak its May, falling to its lowest level in a year, according to data from The Block’s.

On May 14, the hash rate fell from 180 EH/s to its current value of 90 EH/s, according to The Block.

This decline – the largest in bitcoin’s history – bucked the long-term upward trend that has been historically seen.

The hash rate is a key measure of how much computing power is supporting the network. It is also important to the bitcoin security prtocol that prevents any double spending of bitcoin.

The dip can largely be attributed to China’s intensifying crackdown on bitcoin mining. The Asian superpower is currently the world’s largest bitcoin miner, accounting for over 65% of activity, according to data from the Cambridge Centre for Alternative Finance.

In the past, there has also been a high correlation between the hash rate and bitcoin’s price, which could signal further pain to come for the world’s largest cryptocurrency.

Bitcoin in recent days has been trading rangebound at just around half its April peak price of nearly $65,000. It was down by 3.76%, to $34,606 as of 9:06 a.m. ET.

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Bitcoin tumbles 8% after China steps up crackdown on crypto mining, shutting down 26 key sites in Sichuan

China bitcoin mining crackdown Chinese flag cryptocurrencies
China is increasingly cracking down on bitcoin.

Bitcoin dropped 8% on Monday after Chinese authorities ramped up their crackdown on cryptocurrency “mining” over the weekend, with bodies in the Sichuan province ordering 26 of the biggest miners to halt operations.

The world’s biggest cryptocurrency fell to $32,950 as of 6.20 a.m. ET. Bitcoin was down around 49% from April’s record high of close to $65,000, but was still roughly 12% higher for the year.

Other cryptocurrencies also dropped sharply, with ether down around 6% and binance coin roughly 4% lower, according to Coinmarketcap. A broader market sell-off also appeared to be weighing on crypto, as investors moved towards safer assets.

The latest move by Chinese authorities to restrict bitcoin mining came in the southwestern Sichuan province over the weekend, when bitcoin miners were told to “clean up and terminate” their operations. Sichuan authorities said 26 bitcoin mining companies must be closed down on Sunday, according to a notice seen by the South China Morning Post.

Chinese state media outlet Global Times then reported that more than 90% of China’s bitcoin mining capacity was estimated to be closed down, at least for the short term, on Sunday.

Bitcoin mining – whereby computers solve complex puzzles to secure the network and mint new coins – has become a target in increasingly climate-conscious China because of the huge amounts of energy it uses.

Sichuan’s clampdown followed similar moves by authorities in Xinjiang, Yunnan and Qinghai.

“The dominant driver of bitcoin right now is the crackdown on mining & trading in China that began in May,” Michael Saylor, a leading bitcoin bull and chief executive of tech firm MicroStrategy, wrote on Twitter.

“This created a forced & rushed exodus of Chinese capital & mining from the bitcoin network,” Saylor said, describing this as “a tragedy for China and a benefit for the Rest of the World over the long term.”

Jeffrey Halley, senior market analyst at currency group Oanda, said the broader drop in risky assets following the Federal Reserve meeting was also weighing on bitcoin. Stocks have sold off after Fed officials on Wednesday moved forward their estimates of when the US central bank would have to raise interest rates.

“If, as I expect, the global buy-everything unwind continues this week, bitcoin will feel those chill winds as well,” Halley said.

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Meet the company mining bitcoin using the flare gas from oil drilling – and drawing investment from Coinbase and the Winklevii

Bitcoin mining flare gas
One of Crusoe Energy’s flare-mitigation centres in Montana.

  • Crusoe Energy captures the energy from flare gas at oil patches and uses it to “mine” bitcoin.
  • The company is now one of the US’s biggest miners and has attracted investment from Coinbase.
  • The crypto world is increasingly focused on the climate, particularly after Elon Musk’s criticisms.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Hunter Lowe, a 27-year-old electrician from Tennessee, was working for around $10 an hour in his home state and supporting a family of three when he decided to move to North Dakota and look for a new job.

He never expected to end up working in the bitcoin business.

But Lowe is now an electrician at Crusoe Energy, a company that captures the flare gas from oil patches and uses the energy to “mine” for bitcoin. It says its systems slash CO2-equivalent emissions from gas flaring by up to 63% and that each one has the equivalent effect of taking around 1,700 cars off the road.

Lowe describes it as “the best job I’ve ever had,” which pays “way more than fair.” And he says business has been good during 2021’s crypto boom. “We’re getting busier and busier every time another company finds out about us,” he told Insider.

Crusoe isn’t the only company in the business, with others including EZ Blockchain doing similar things. Yet it’s one of the biggest, and has attracted investment from the listed crypto exchange Coinbase and the Winklevii twins‘ Winklevoss Capital.

Crusoe mines bitcoin directly on site

So how does it work? When oil companies drill for the black stuff, they often hit natural gas too. Yet, most drillers lack the infrastructure to sell the gas and so burn it off in a process called flaring, creating the distinctive flames above oil sites.

This is where Crusoe comes in. It installs a piping system to divert the natural gas away from the flares and into generators. They produce electricity which is then used to power computers directly at the oil site.

The computers “mine” bitcoin – that is, they solve complex puzzles which help to secure the bitcoin network and create new coins. One bitcoin was worth around $39,000 on Thursday.

“We pay the operator for the gas that we use in our generators, providing them with an incremental revenue stream where they were previously flaring the gas for zero,” Crusoe’s president Cully Cavness told Insider.

He said Crusoe, which has deployed units in North Dakota, Colorado, and Montana among other states, is now one of the biggest bitcoin miners in North America.

The focus on bitcoin’s energy use has intensified

Yet, for some people, paying oil companies for their byproducts is simply propping up the fossil fuels industry. Others argue that bitcoin is socially useless and there are much better uses for energy.

New York University economist Nouriel Roubini has slammed cryptocurrencies as pointless and inefficient, for instance, saying that “the Flintstones had a better monetary system.”

Elon Musk, once the most prominent bitcoin evangelist, has halted payments for Tesla cars in the token and attacked its “insane” energy use. Bank of America analysts have estimated that each $1 billion of inflows into bitcoin uses the same amount of energy as 1.2 million cars.

Yet, Cavness says Crusoe “maintains an internal [environmental] standard to select projects only if they’re net reducers of greenhouse gasses.”

He also said Crusoe’s prices are such that “we don’t create an economic incentive to opt out of traditional midstream gas capture systems.”

And he says the company’s generators aren’t only focused on bitcoin, but are increasingly powering other energy-intensive processes such as cloud computing.

Investors are keen on the technology

Musk’s attacks on bitcoin’s energy consumption have shone a light on the issue and crypto companies are paying more attention to the climate than ever.

The green focus appears to be helping Crusoe, which recently raised $128 million to help expand its flare capture technology to more than 100 units, from around 40 currently. Investors included Valor Equity Partners, Bain Capital, and the Agnelli family’s Exor.

As someone who’s worked for Halliburton and natural gas companies, Lowe admits he was skeptical about “the whole green thing” in the past. Being at Crusoe has changed his mind, however, and he argues its work is “definitely for the better.”

Read the original article on Business Insider

The World Bank rejects El Salvador’s request for help implementing bitcoin due to the token’s climate impact

World Bank spring meeting
The World Bank is an international organization that supports developing countries.

El Salvador has asked the World Bank for help implementing bitcoin as legal tender, only to be swiftly rejected, with the international organization citing the cryptocurrency’s climate impact and lack of transparency as the reason.

The Central American country became the first in the world to vote to make bitcoin legal tender last week.

On Wednesday, El Salvador’s finance minister Alejandro Zelaya said the country had asked the World Bank for technical assistance in making the move become a reality.

Yet the international organization – which provides financing and economic support to developing countries – quickly declined the request.

“While the government did approach us for assistance on bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings,” a World Bank spokesperson told Insider.

The World Bank is one of many institutions to highlight bitcoin’s environmental impact. And its concerns about the cryptocurrency’s transparency echo those of central banks and regulators around the world, who worry it is used for money laundering and drug crime.

The computing process that secures the network and creates new bitcoins is incredibly energy intensive, using as much energy each year as whole countries, according to research by Cambridge University.

El Salvador’s request for help, and rejection, are signs that implementing bitcoin as a national tender may be more easily said than done. The government plans for bitcoin to be used for everyday payments and transactions alongside its current legal tender, the US dollar.

The International Monetary Fund last week said it has legal and economic concerns about the move. IMF spokesperson Gerry Rice told a press briefing: “Crypto assets can pose significant risks and effective regulatory measures are very important when dealing with them.”

Nonetheless, El Salvador’s decision boosted bitcoin, which had fallen as low $31,000 in early June. The cryptocurrency traded at $39,220 on Thursday, up around 1.8% for the day.

Read the original article on Business Insider

El Salvador asks World Bank for help implementing bitcoin – but quickly gets rejected over mining’s climate impact

El Salvador bitcoin people
El Salvador is making bitcoin legal tender alongside the US dollar.

El Salvador has asked the World Bank for help implementing bitcoin as legal tender, only to be swiftly rejected, with the international organization citing the cryptocurrency’s climate impact and lack of transparency as the reason.

The Central American country became the first in the world to vote to make bitcoin legal tender last week.

On Wednesday, El Salvador’s finance minister Alejandro Zelaya said the country had asked the World Bank for technical assistance in making the move become a reality.

Yet the international organization – which provides financing and economic support to developing countries – quickly declined the request.

“While the government did approach us for assistance on bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings,” a World Bank spokesperson told Insider.

The World Bank is one of many institutions to highlight bitcoin’s environmental impact. And its concerns about the cryptocurrency’s transparency echo those of central banks and regulators around the world, who worry it is used for money laundering and drug crime.

The computing process that secures the network and creates new bitcoins is incredibly energy intensive, using as much energy each year as whole countries, according to research by Cambridge University.

El Salvador’s request for help, and rejection, are signs that implementing bitcoin as a national tender may be more easily said than done. The government plans for bitcoin to be used for everyday payments and transactions alongside its current legal tender, the US dollar.

The International Monetary Fund last week said it has legal and economic concerns about the move. IMF spokesperson Gerry Rice told a press briefing: “Crypto assets can pose significant risks and effective regulatory measures are very important when dealing with them.”

Nonetheless, El Salvador’s decision boosted bitcoin, which had fallen as low $31,000 in early June. The cryptocurrency traded at $39,220 on Thursday, up around 1.8% for the day.

Read the original article on Business Insider

Bitcoin surges above $40,000 after Elon Musk says Tesla will resume crypto payments when mining is cleaner

Elon Musk with a bitcoin symbol
  • Bitcoin climbed above $40,000 after Elon Musk suggested Tesla might accept it as payment again.
  • Musk said he’ll do it when there’s proof of about 50% of mining energy used is clean.
  • Tesla halted bitcoin payments last month over concern its mining process is damaging to the environment.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Bitcoin traded above $40,000 on Monday after Elon Musk tweeted Tesla would accept payment in cryptocurrency again once mining can be done using cleaner energy.

“When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions,” the billionaire said in a tweet.

He was responding to a Cointelegraph report that quoted Magda Wierzycka, a South African billionaire businesswoman and CEO of asset manager Sygnia, saying that Musk’s bitcoin-related tweets should have led to a regulatory investigation.

According to Wierzycka, Musk deliberately pumped up bitcoin’s value and then sold a chunk of his exposure at its peak. But the Tesla boss disputed this claim, saying “Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market.”

Elon Musk tweet on resuming bitcoin payments.

Bitcoin saw further gains after billionaire Paul Tudor Jones said on CNBC he likes the digital asset as a portfolio diversifier. ” The only thing I know for certain, I want 5% in gold, 5% in bitcoin, 5% in cash, 5% in commodities,” he said on Monday.

The cryptocurrency was last trading 13% higher around $40,700 on Monday as of 9:35 a.m. ET, and it is up 40% so far this year.

“The charts suggest consolidation followed by a rally through $41,000 targets further gains to around $44,000,” Jeffrey Halley, a senior market analyst at OANDA, said.

Musk revealed in February his electric car company invested $1.5 billion in bitcoin and that it would start accepting it as payment for its vehicles. Barely three months later, Tesla made a U-turn and stopped payment in bitcoin because of how energy-intensive the mining process is.

“We are concerned about the rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk said in a tweet at the time.

It isn’t clear yet how Musk will gather data to assess bitcoin’s clean energy use. But he previously suggested that the cryptocurrency can rid itself of its negative environmental image if top miners prove they’re using greener energy by posting audited data on renewables used.

Read More: Founders of a leading crypto brokerage lay out a thesis for why ether looks ‘very cheap’ while providing a more conservative case for bitcoin – and share 2 ETH challengers to watch

Read the original article on Business Insider

Bitcoin surges near $40,000 after Elon Musk says Tesla will resume crypto payments when mining is cleaner

Elon Musk with a bitcoin symbol
  • Bitcoin jumped above $39,000 after Elon Musk suggested Tesla might accept it as payment again.
  • Musk said he’ll do it when there’s proof of about 50% of mining energy used is clean.
  • Tesla halted bitcoin payments last month over concern its mining process is damaging to the environment.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Bitcoin traded above $39,000 for a second day on Monday after Elon Musk tweeted Tesla would accept payment in cryptocurrency again once mining can be done using cleaner energy.

“When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions,” the billionaire said in a tweet.

He was responding to a Cointelegraph report that quoted Magda Wierzycka, a South African billionaire businesswoman and CEO of asset manager Sygnia, saying that Musk’s bitcoin-related tweets should have led to a regulatory investigation.

According to Wierzycka, Musk deliberately pumped up bitcoin’s value and then sold a chunk of his exposure at its peak. But the Tesla boss disputed this claim, saying “Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market.”

Elon Musk tweet on resuming bitcoin payments.

Bitcoin was last trading 11% higher around $39,530 on Monday as of 3:20 a.m. ET, and is up 36% so far this year.

“The charts suggest consolidation followed by a rally through $41,000 targets further gains to around $44,000,” Jeffrey Halley, a senior market analyst at OANDA, said.

Musk revealed in February his electric car company invested $1.5 billion in bitcoin and that it would start accepting it as payment for its vehicles. Barely three months later, Tesla made a U-turn and stopped payment in bitcoin because of how energy-intensive the mining process is.

“We are concerned about the rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk said in a tweet at the time.

It isn’t clear yet how Musk will gather data to assess bitcoin’s clean energy use. But he previously suggested that the cryptocurrency can rid itself of its negative environmental image if top miners prove they’re using greener energy by posting audited data on renewables used.

Read More: Founders of a leading crypto brokerage lay out a thesis for why ether looks ‘very cheap’ while providing a more conservative case for bitcoin – and share 2 ETH challengers to watch

Read the original article on Business Insider