Bitmain Invests $53.9 Million in Core Scientific

Bitmain, a manufacturer of cryptocurrency mining equipment, will invest $53.9 million in bitcoin mining company Core Scientific, the miner announced today.

The Texas-based bitcoin miner said that Bitmain’s investment comes as the two companies seek to expand their “longstanding relationship” as part of a supply agreement.

Both companies have agreed on a combination of equity and cash to fund the acquisition of new Bitcoin mining hardware.

According to the statement, Bitmain intends to deliver 27,000 bitcoin mining servers to Core Scientific, which filed for Chapter 11 bankruptcy protection in December, in exchange for $23.1 million in cash and $53.9 million in Core Scientific common stock.

Core Scientific stated that a bankruptcy court will determine the per-share value of the company’s stock following the Chapter 11 reorganization plan, whose sanction is anticipated in the fourth quarter of this year.

According to the company, Bitmain has also inked a new hosting agreement with Core Scientific.

Max Hua, CEO of Bitmain, said in the statement, “[Core Scientific’s] professionalism, integrity, and commitment to the success of their hosting customers and the growth of the Bitcoin Network are unmatched in the industry.”

Core Scientific plans to receive and activate the 27,000 new units in the fourth quarter of this year, which is anticipated to increase its self-mining hash rate by 4.1 exahashes.

Core Scientific operated approximately 206,000 bitcoin mining machines for hosting and self-mining as of the end of August at its U.S. facilities, resulting in a total hash rate of 22 exahashes per second.

It said it mined 965 bitcoin in August and 9,755 bitcoin in the first eight months of this year, “more than any other listed North American bitcoin miner.”