Compute North, a bitcoin mining company, filed for Chapter 11 bankruptcy protection in Texas Thursday. This is as the crypto winter continues its pressure on crypto mining operations. According to the bankruptcy petition, Compute North filed for Chapter 11 bankruptcy protection in Texas on Thursday, September 22nd. The company seeks to stabilize operations to repay creditors.
Compute North Files to Protect Chapter 11 Bankruptcy Protection
Compute North announced that it was building a 300-MW data center in Texas five months ago. Compute North had already signed a deal with Marathon Digital Holdings at the end 2021. The two companies planned to host more that 100,000 ASIC miners in data centers across the country.
Recent Chapter 11 bankruptcy protection filings show that Compute North is currently dealing with financial problems. Kristyan Mcjolsnes, the head of Compute North’s sustainability and marketing team, explained to David Pan and Steven Church that the company aims to stabilize its operations.
Mjolsnes stated that Compute North is looking for "the chance to stabilize its business, and implement a comprehensive restructuring program." The company's executive stated that "[It]will enable us to continue serving our customers and partners, and make the necessary investment to achieve our strategic goals."
Compute North raised approximately $410 million this year in equity and debt funding. Compute North also had to contend with falling bitcoin prices. At the end of June, it was reported that $4 billion worth of bitcoin mining loans were in trouble. Falling bitcoin and crypto asset prices have triggered a number of bankruptcies stemming from digital currency lenders and cryptocurrency-backed hedge funds.
MARA Stock downgraded over Compute North’s recent bankruptcy filing, Marathon Says Compute North’s Restructuring "Will not Impact Current Mining Operations"
After Gregory Lewis, BTIG analyst, decided to downgrade Marathon Digital's equity stock due to Compute North's bankruptcy, Marathon Digital's stock has been affected. Lewis stated that Compute North's latest filing will "weigh upon MARA's capacity to grow its hash capability." Longer term, Compute North's bankruptcy could offer MARA an opportunity to build a data center infrastructure footprint for distressed pricing." Marathon Digital also discussed the recent bankruptcy filing on Twitter.
Marathon Digital tweeted, "Today, we published a filing regarding one of our hosting providers." According to the available information, we believe that the filing will not affect our current mining operations. The bitcoin mining company said that they are currently in contact with the hosting provider, and will monitor their progress throughout the process."
What are your thoughts on Compute North's bankruptcy filing, and Marathon's stock being downgraded? Please comment below to let us know your thoughts on this topic.
Frequently Asked Questions
Should You Buy Gold?
In the past, gold was considered a haven for investors during economic turmoil. Many people are shifting away from traditional investments like bonds or stocks to instead look toward precious metals such gold.
The trend for gold prices has been upward in recent years but they still remain low relative to other commodities like silver and oil.
This could be changing, according to some experts. They say that gold prices could rise dramatically with another global financial crisis.
They also note that gold is increasingly popular because of its perceived intrinsic value and potential return.
If you are considering investing in gold, here are some things that you need to keep in mind.
- The first thing to do is assess whether you actually need the money you're putting aside for retirement. You can save for retirement and not invest your savings in gold. However, when you retire at age 65, gold can provide additional protection.
- Second, you need to be clear about what you are buying before you decide to buy gold. Each one offers different levels security and flexibility.
- Last but not least, gold doesn't provide the same level security as a savings account. Your gold coins may be lost and you might never get them back.
So, if you're thinking about buying gold, make sure you do your research first. If you already have gold, make sure you protect it.
How is gold taxed in an IRA?
The fair market value of gold sold is the basis for tax. You don't pay taxes when you buy gold. It is not considered income. If you sell it later, you'll have a taxable gain if the price goes up.
As collateral for loans, gold is possible. Lenders look for the highest return when you borrow against assets. This usually involves selling your gold. There's no guarantee that the lender will do this. They might just hold onto it. Or, they may decide to resell the item themselves. The bottom line is that you could lose potential profit in any case.
In order to avoid losing your money, only lend against your precious metal if you plan to use it to secure other collateral. Otherwise, it's better to leave it alone.
Can I hold physical gold in my IRA?
Not just paper money or coins, gold is money. It is an asset that people have used over thousands of years as money, and a way to protect wealth from inflation and economic uncertainties. Today, investors invest in gold as part a diversified portfolio. This is because gold tends do better in financial turmoil.
Many Americans now invest in precious metals. Even though owning gold is not a guarantee of making money, there are many reasons why you might want to add gold to your retirement savings portfolio.
One reason is that gold has historically performed better than other assets during periods of financial panic. Between August 2011 to early 2013, gold prices rose close to 100 percent while the S&P 500 fell 21 per cent. During these turbulent market times, gold was among few assets that outperformed the stocks.
One of the best things about investing in gold is its virtually zero counterparty risk. Your stock portfolio can fall, but you will still own your shares. If you have gold, it will still be worth your shares even if the company in which you invested defaults on its debt.
Finally, the liquidity that gold provides is unmatched. This means that, unlike most other investments, you can sell your gold anytime without worrying about finding another buyer. The liquidity of gold makes it a good investment. This allows you to profit from short-term fluctuations on the gold market.
How much of your portfolio should be in precious metals?
To answer this question we need to first define precious metals. Precious elements are those elements which have a high price relative to other commodities. This makes them valuable in investment and trading. Gold is today the most popular precious metal.
However, many other types of precious metals exist, including silver and platinum. While gold's price fluctuates during economic turmoil, it tends to remain relatively stable. It also remains relatively unaffected by inflation and deflation.
All precious metals prices tend to rise with the overall market. They do not always move in the same direction. For instance, gold's price will rise when the economy is weak, while precious metals prices will fall. Investors are more likely to expect lower interest rates making bonds less attractive investments.
Contrary to this, when the economy performs well, the opposite happens. Investors prefer safe assets such as Treasury Bonds and demand fewer precious metals. These precious metals are rare and become more costly.
It is important to diversify your portfolio across precious metals in order to maximize your profit from precious metals investments. You should also diversify because precious metal prices can fluctuate and it is better to invest in multiple types of precious metals than in one.
Can I buy or sell gold from my self-directed IRA
Although you can buy gold using your self-directed IRA account, you will need to open an account at a brokerage like TD Ameritrade. You can also transfer funds from an existing retirement fund.
The IRS allows individuals to contribute up to $5,500 annually ($6,500 if married and filing jointly) to a traditional IRA. Individuals can contribute up to $1,000 annually ($2,000 if married and filing jointly) directly to a Roth IRA.
If you do decide to invest in gold, you'll want to consider purchasing physical bullion rather than investing in futures contracts. Futures contracts can be described as financial instruments that are determined by the gold price. These financial instruments allow you to speculate about future prices without actually owning the metal. Physical bullion, however, is real gold and silver bars that you can hold in your hand.
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's Not Exactly Legal – WSJ
3 Ways To Invest in Gold For Retirement
It's important to understand how gold fits in with your retirement plan. There are many ways to invest in gold if you have a 401k account at work. It is also possible to invest in gold from outside of your work environment. If you have an IRA (Individual Retirement Account), a custodial account could be opened at Fidelity Investments. You may also want to purchase precious metals from a reputable dealer if you don’t already have them.
These are three easy rules to remember if you invest in gold.
- Buy Gold With Your Cash – Do not use credit cards to purchase gold. Instead, cash in your accounts. This will protect you from inflation and help keep your purchasing power high.
- Physical Gold Coins: You should own physical gold coins, not just a certificate. Physical gold coins are easier to sell than certificates. You don't have to store physical gold coins.
- Diversify Your Portfolio. Never place all your eggs in the same basket. In other words, spread your wealth around by investing in different assets. This helps reduce risk and gives you more flexibility during market volatility.
By: Jamie Redman
Title: Bitcoin Miner Marathon Digital’s Shares Downgraded After Compute North Files for Bankruptcy Protection
Sourced From: news.bitcoin.com/bitcoin-miner-marathon-digitals-shares-downgraded-after-compute-north-files-for-bankruptcy-protection/
Published Date: Fri, 23 Sep 2022 18:30:43 +0000