Bitcoin miners earn from three factors: the price of bitcoin (BTC), the cost of power, and the availability of high-performance specialist mining rigs known as ASICs (application-specific integrated circuits).
When bitcoin was worth twice as much as it is now, US businesses frequently borrowed the money with relatively interest rates rather than selling their minted bitcoin, according to a news agency.
Managers even used their ASICs as security to loan money to fund overheads, expecting that the bitcoin price would continue to increase, permitting them to mine economically.

The Bitcoin Miners

After accepting out high-interest debts to finance their extremely bullish cryptocurrency and bitcoin buying habits rather than selling their bitcoin, the majority of bitcoin miners potentially face insolvency, or in other words liquidation.

This statement is in accordance with the industry participants, which is likely to trigger a domino effect of crypto lenders and investment banks with exposure levels of going out of business.

Bitcoin miners earn from three factors: the price of bitcoin (BTC), the cost of power, and the availability of high-performance specialist mining rigs known as ASICs (application-specific integrated circuits).

All three are causing financial hardship for miners, as well as their suppliers and other stakeholders.

The Story Post-Crash

BTC has dropped 30% in the last month, from $31,000 to around $21,000. Summertime power rates in the Northeastern United States, which is home to a large number of miners, are expected to quadruple year over year.

When bitcoin was worth twice as much as it is now, US businesses frequently borrowed the money with relatively interest rates rather than selling their minted bitcoin, according to a news agency.

While the cost of energy is an issue, the value of bitcoin is the biggest cause of suffering for miners, particularly those that use a lot of leverage.

Managers even used their ASICs as security to loan money to fund overheads, expecting that the bitcoin price would continue to increase, permitting them to mine economically.

Such loans were underwritten by a variety of lenders, including the recently bankrupt Babel Finance, putting the creditor in danger of being trapped with bulky, illiquid gear that goes bust every second without electricity.

That’s not to mention companies willingly closing down their rigs because they can’t make ends meet as the cost of power rises.

Source: https://www.thecoinrepublic.com/2022/06/18/the-crashing-of-bitcoin-reveals-a-new-face-of-the-currency/