In late 2021 miners were the toast of the town with a surefire path to profit: hook powerful computers up to cheap power, crack fiendish maths puzzles and sell newly minted coins on the booming market.
The global revenue from mining of digital currency has dropped to $17.2 million a day despite a global energy crisis, down about 72% from last November when miners were racking up $62 million a day, according to data from Blockchain.com.
Joe Burnett, head analyst at Blockware Solutions said that miners have continued to watch margins compress, the price of bitcoin has fallen, mining difficulty has risen and energy prices have gone up.
That has put pressure on some players who bought expensive mining machines or rigs, banking on rising bitcoin prices to recoup their investment.
Since August, the price of cryptocurrencies has failed to break above $25,000, let alone regain November's all-time high of $69,000.
The process of solving puzzles to mine token has become more difficult as more miners come online. They have to consume more computing power to increase operating costs, especially for those without long-term power pricing agreements.
Since July, the profit for one terahash per second of computing power has fluctuated between $0.119 and $0.070 a day, down from $0.45 in November last year and around its lowest level for two years.
The grim state of affairs could be here to stay, as Luxor's Hashrate Index, which measures mining revenue potential, has fallen almost 70% this year.
It's been painful for miners.
The shares of Marathon Digital, RiotBlockchain and the ValkyrieBitcoin MinersETF have fallen more than 60% this year, for example, while Compute North filed for bankruptcy last week.
The last bitcoin is expected to be mined in 2140, more than a century away - and there is a spy opportunity in the gloom.
The ideal time to get in is when the market is low, the same mining rigs that went for $10,000 earlier this year, you can get that for 50% to 75% off right now, said William Szamosszegi, CEO of Sazmining Inc.
Many miners are cutting back on buying rigs, forcing makers to cut prices.
In January, the popular S 19 J Pro rig sold for $10,100 on average, but now sells for $3,200, analysts at Luxor said. Prices for bulk orders of mining machines had fallen by 10% in the past week.
Chris Kline, co-founder ofBitcoin IRA, said miners would have to focus on energy efficiency, both to bring costs down and avoid any repercussions from climate change related regulations.
He said miners will look to stay afloat regardless of current market conditions by managing their balance sheet, processing units and energy costs.