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Basic scientific CORZ:one of the largest publicly traded Bitcoin: BTC / USD US mining companies filed for Chapter 11 bankruptcy protection early Wednesday, CNBC reported, citing sources.

What happenedAccording to CNBC, the drastic move follows a year of plummeting cryptocurrency prices and an ever-rising energy.

Core Scientific’s market capitalization has plummeted from a valuation of $4.3 billion in July 2021 when it went public through a special purpose acquisition vehicle (SPAC) to just $78 million after the close of trading on Tuesday. This marks a more than 98% drop in the stock’s value over the past year.

Core Scientific did not immediately respond to Benzinga’s request for comment.

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The principle behind Core Scientific’s business model is that mining for proof-of-concept cryptocurrencies such as Bitcoin. Supported by highly efficient data centers and specialized computers, the process validates transactions and simultaneously creates new currency tokens, all at the expense of expensive equipment that consumes large amounts of electricity.

The company previously warned in an October statement that its common shareholders could suffer a complete loss of their investment. The bitcoin mining firm further stated that it was “severely impacted by the prolonged decline in the price of bitcoin, the increase in electricity costs, the increase in the global hash rate of the bitcoin network and the legal dispute with Celsius”.

Price action: At the time of writing, BTC: traded at $1,213, down 3.36%. CORZ was trading at $0.20, up 3.07%, on Tuesday, according to Benzinga Pro .

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