Signs of a temporary Bitcoin top? Mega crypto merger brings back memories of 2022

The news that CoreWeave (an American company that deals with cloud computing) is acquiring the crypto mining company Core Scientific for an amount of about 9 billion dollars was jubilantly praised on many crypto websites yesterday afternoon. For me though, it brought back memories of 2022.

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CoreWeave and Core Scientific shareholders weren’t too happy about the deal either it seems. After the announcement became public, both stocks dropped, although we should add that Core Scientific rose 50% last week after the Wall Street Journal broke the rumor that the company was going to be acquired. That was also necessary for the big Bitcoin miner, because when Core Scientific started mining Bitcoin a few years ago, it took out a huge loan to buy the equipment needed to do so.

Core Scientific had calculated that it needed to keep Bitcoin above a certain level for the company to make a profit. In 2021, when Bitcoin rose to $69,000, that worked very well. In 2022, when Bitcoin fell to $20,000 and Ethereum switched to proof-of-stake, their profit margins were seriously jeopardized.

FTX

Core Scientific has crypto mining companies in Texas, North Dakota, North Carolina, Georgia, and Kentucky, and they will all be acquired by CoreWeave from now on.

However, this mega deal reminded me of the fall of crypto in 2022. At that time, FTX (back then one of the largest crypto companies in the world) also acquired a number of other big names in the crypto world after they had gotten into trouble. And we all remember what happened to FTX afterwards.

Let’s hope that this acquisition is not the first sign of a temporary top for the Bitcoin price.