By Medha Singh and Lisa Pauline Mattackal
(Reuters) – In late 2021, cryptocurrency miners were the stars with a surefire path to profit: connecting powerful computers to cheap energy, solving complex mathematical puzzles and selling coins in the booming market.
But almost a year is a long time in cryptocurrencies.
Global bitcoin mining revenue fell to $17.2 million a day amid a global energy crisis, down about 72% from last November, when miners amassed $62 million, according to data. from Blockchain.com.
“Bitcoin miners continued to see margins squeezed – the price of bitcoin dropped, mining difficulty increased and energy prices soared,” said Joe Burnett, chief analyst at Blockware Solutions.
The scenario put serious pressure on those who bought expensive mining machines, betting on rising bitcoin prices to recoup their investment. Bitcoin is trading at around $19,000, far below the November all-time high of $69,000.
The grim situation may be here to stay: Luxor’s Hashrate index, which measures mining revenue potential, has dropped nearly 70% so far this year.
Shares in Marathon Digital, Riot Blockchain and Valkyrie Bitcoin Miners ETF are down more than 60% this year. And cryptocurrency mining data center operator Compute North filed for bankruptcy last week.
However, mining is ultimately a long-term gamble – the last bitcoin is expected to be mined in 2140, more than a century away.
“The best time to get in is when the market is down, mining rigs that cost $10,000 earlier this year can be had at 50% to 75% off now,” said William Szamosszegi, president of Sazmining, which plans to open a renewable energy-powered bitcoin mining operation.
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