Cryptocurrency mining firm files for bankruptcy amid Bitcoin slump
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A US-based cryptocurrency mining firm has filed for bankruptcy amid Bitcoin’s declining price.
On Monday, Giga Watt Inc. filed for Chapter 11 bankruptcy protection in a Washington state court, with its shareholders claiming that the company can no longer pay off its debts.
Giga Watt had been offering remote cryptocurrency mining hosting plans at the company’s data centers in Washington, with the promise of low fees to customers. In addition, the company had also been selling mining hardware rigs over its website.
Giga Watt’s business was large enough to make it one of the bigger crypto-mining firms in the world, according to Cointelegraph. However, the company’s business appears to have taken a dive as the price of Bitcoin has plummeted. Back in December 2017, a single Bitcoin was worth $19,000, but now it’s value has sunk to $4,400. According to court documents, Giga Watt now possesses less than $50,000 in assets, but owes between $10 million to $50 million to its creditors.
Originally, Giga Watt had plans to build out 22 crypto-mining “pods” or mini-data centers to serve its customers. However, the company is now only hosting one pod for its clients, according to local news organization iFiber One, which reported that Giga Watt may actually owe nearly $70 million to its largest creditors.
Giga Watt did not immediately respond to a request for comment. But its bankruptcy filing is another sign that demand for cryptocurrency mining has fizzled out. Last week, Nvidia reported it had a glut of unsold graphics cards in part because miners were no longer buying them.
The good news is that without the crypto-mining demand, the prices for graphics cards have been returning to normal.