In late 2021, miners were the toast of the town with a surefire path to profit: hook powerful computers up to cheap power, crack fiendishly complex maths puzzles and then sell newly minted coins on the booming market.
A year's a long time in crypto.
Global revenue from bitcoin mining has dropped to $17.2 million a day amid a crypto winter and global energy crisis, down about 72% from last November when miners were racking up $62 million a day, according to data from Blockchain.com.
"Bitcoin miners have continued to watch margins compress – the price of bitcoin has fallen, mining difficulty has risen and energy prices have soared," said Joe Burnett, head analyst at Blockware Solutions.
That's put serious pressure on some players who bought expensive mining machines, or rigs, banking on rising bitcoin prices to recoup their investment.
Bitcoin is trading at around $19,000 and has failed to break above $25,000 since August, let alone regain November's all-time high of $69,000.
At the same time, the process of solving puzzles to mine tokens has become more difficult as more miners have come online. This means they must devour more computing power, further upping operating costs, especially for those without long-term power pricing agreements.
Bitcoin miners' profit for one terahash per second of computing power has fluctuated between $0.119 and $0.070 a day since July, down from $0.45 in November last year and around its lowest levels for two years.
The grim state of affairs could be here to stay, too: Luxor's Hashrate Index, which measures mining revenue potential, has fallen almost 70% so far this year.
2140: THE LAST BITCOIN
It's been painful for miners.
Shares of Marathon Digital, Riot Blockchain and Valkyrie Bitcoin Miners ETF have sunk more than 60% this year, for example, while crypto-mining data center operator Compute North filed for bankruptcy last week.
Yet mining is ultimately a long-term proposition – the last bitcoin is expected be mined in 2140, more than a century away – and some spy opportunity in the gloom.
"The best time to get in is when market's 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 which is planning to open a renewable-energy powered bitcoin mining operation.
Indeed, many miners are cutting back on buying rigs, forcing makers to cut prices.
For instance, the popular S19J Pro rig sold for $10,100 in January on average, but now sells for $3,200, analysts at Luxor said, also noting prices for bulk orders of some mining machines had fallen by 10% in just the past week.
Chris Kline, co-founder of crypto investment platform Bitcoin IRA, said miners would have to be "hyper-focused" on energy efficiency, both to bring costs down and to avoid any repercussions from climate change-related regulations.
"From managing their balance sheet, processing units and energy costs, miners will look to stay afloat regardless of current market conditions," he added.