Bitcoin: A Texas mining giant declares bankruptcy

New blow for the Bitcoin mining industry. Rhodium Enterprises has just filed for bankruptcy in Texas, revealing debts of up to $100 million. This announcement comes in a challenging context for miners, amid falling prices and rising energy costs.

Bitcoin miner Rhodium files for bankruptcy in Texas

The Bitcoin mining sector is experiencing a new shock: 2 years after the bankruptcy of Core Scientific, another company is following the same path.

Rhodium Enterprises, a company specializing in bitcoin extraction, has filed for voluntary bankruptcy under Chapter 11 with the Southern District of Texas bankruptcy court. The filing reveals liabilities estimated between $50 and $100 million, while total assets range between $100 and $500 million.

This move includes six subsidiaries of the company, including Rhodium Encore and Rhodium 2.0. The bankruptcy follows the failure to repay a $54 million loan last July.

Despite two restructuring proposals, disagreements among stakeholders hastened the default. This procedure will allow Rhodium to reorganize its debts while maintaining its operations.

A sector under pressure

The bankruptcy of Rhodium illustrates the increasing difficulties of Bitcoin miners. According to a recent JPMorgan report, their profits have plummeted following the April “halving“, which halved bitcoin rewards. At the same time, rising electricity prices are weighing heavily on their margins.

Other major players have already faced the same fate. Core Scientific, one of the largest American miners, filed for bankruptcy at the end of 2022 before restructuring in early 2024. The sector faces a deep crisis, caught between Bitcoin volatility and rising operational costs.

Paradoxically, this bankruptcy comes even as Texas, the epicenter of mining in the United States, is multiplying initiatives to support the industry. In August 2023, the state passed a law granting tax exemptions to miners using flared gas as an energy source.