Bitcoin prices have plunged, falling to just over $70,000 — which is still near $63,000 level last seen in October 2024. The sharp drop has made mining the digital currency far less profitable, and some large miners have already shut off their machines.
Power costs are up, and Bitcoin prices are down, squeezing miners. The hash price index, which reflects how much money miners make for their work, bottomed out this week at a record low, according to data from Luxor Technology.
The average cost of mining one Bitcoin is around $87,000, CoinDesk figures reveal. That’s much higher than today’s market price, which has made mining a losing business for some operators.
Especially since the selloff has been so punishing that some industry observers have compared it to the 2021 crash that happened after China banned cryptocurrency mining. Some traders are worried the price of Bitcoin could drop to as low as $30,000.
The decline is the largest since the China ban, said Harry Sudock, chief business officer at CleanSpark. He cited a spike in electricity prices from winter storms and a broader selloff in tech stocks as major reasons.
Miners have shut down equipment during price spikes or adverse weather in the past, but not on this scale. The timing also is unfortunate, as Bitcoin shareholders frequently refer to it being a safe place in a period of global turmoil.
But investors say it's gold that they've preferred instead. Gold prices soared to all time highs last year as buyers sought safety, while Bitcoin went the other way.
Investor Michael Burry cautioned that more selling could set up an economic spiral. There’s no clear reason why Bitcoin’s plunge should abate, he wrote.
Mining profits are shrinking, so some miners are altering their hardware from mining cryptocurrency to supporting data centers that run AI systems.
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