Last year was harvest time for crypto miners. Now, they’re getting hit on all sides.
Crypto prices are plunging. Miners’ electricity bills are surging. Practically no one wants to buy their equipment.
It is a sharp turnaround from 2021, when crypto prices were soaring and many mining firms went on a mostly debt-funded buying spree of mining machines. But this year, crypto prices have been dropping and major crypto projects and companies have been wiped out. That has reduced the profits that miners can make from harvesting digital coins—and from selling their equipment in a pinch.
Meanwhile, prices for electricity—needed to keep the miners’ powerful computers running—are soaring. Russia’s war with Ukraine has hamstrung global energy supplies, while an extreme heat wave has bolstered energy demand from families that need to cool their homes.
Shares of crypto miners Marathon Digital Holdings Inc., Riot Blockchain Inc. and Core Scientific Inc. are all down 55% or more this year.
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