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.
According to data fromBitcoin.com, global revenue from mining has dropped to $17.2 million a day, down about 72% from last November when miners were racking up $62 million a day.
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.
It's put pressure on some players who bought expensive mining machines, or rigs, on the rise ofBitcoin prices to recoup their investment.
It is trading at around $19,000 and has not broken above $25,000 since August, so 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. This means 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 a terahash per second of computing power has gone 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, Riot Blockchain and Valkyrie Bitcoin Miners ETF have sunk more than 60% this year, while Compute North filed for bankruptcy last week.
It is a long-term proposition - the last bitcoin is expected to be mined in 2140, more than a century away - and there is a spy opportunity in the gloom.
When the market is low, the same mining rigs 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., which is planning to open a renewable-energy powered mining operation.
Many miners are cutting back on buying rigs, forcing makers to cut prices.
According to analysts at Luxor said that the popular S 19 J Pro rig sold for $10,100 in January, but now sells for $3,200, and that prices for bulk orders of mining machines had fallen by 10% in the past week.
Chris Kline, co-founder of the Bitcoin IRA, said miners would have to focus on energy efficiency 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, regardless of how they manage their balance sheet, processing units and energy costs.