Are Bitcoin Miners Still Mining Bitcoin?

As the price of Bitcoin drops, so does interest and concern about the Bitcoin mining industry. Here are the important details about BTC mining in 2023.

Bitcoin mining is the act of contributing to the Bitcoin network by solving complex mathematical operations with high-performance computers and receiving Bitcoin in return. By the same token, the mining industry is directly related to network stability, price, etc. 

The changing Bitcoin mining country and industry landscape

Currently, the United States dominates the Bitcoin mining market. According to January 12 data from the Cambridge Centre for Alternative Finance, China and Kazakhstan are trailing the United States. China used to be the clear no. 1, but in May 2021, the Chinese government issued a blanket ban against cryptocurrency mining, which shifted the industry balance. Within the United States, the densest mining states, in order, are Georgia, Texas, Kentucky, New York and California. 

But recently, as the Bitcoin mining industry faces a major crisis, the topography is shifting. On December 21, Core Scientific, one of the world’s largest publicly traded cryptocurrency mining companies, announced that it would file for Chapter 11 bankruptcy in the Texas Bankruptcy Court. The company stated that while its cash flow was still solid, it was no longer sufficient to cover the liabilities of its leased equipment. 

According to a CNBC report, the company will not go through liquidation procedures to close its business and will continue to operate as normal while seeking settlements with its senior creditors. Unlike ‘Chapter 7’, which stipulates the liquidation of companies with no possibility of rehabilitation, or ‘Chapter 13’, which contains personal bankruptcy procedures, ‘Chapter 11’ of the US Bankruptcy Code is intended to salvage operations by restructuring the debtor’s business activities, debts, and assets under the supervision of the bankruptcy court.

In September, crypto mining infrastructure solution provider Compute North filed for Chapter 11 bankruptcy protection in a Texas court. Marathon Digital, yet another mining company, revealed that it had racked up $800 billion in losses. Marathon Digital has taken out hundreds of millions of dollars in crypto-secured loans from crypto-friendly banks such as Silvergate Capital.

Greenwich Generation, a New York-based bitcoin miner, said it posted a net loss of more than $100 million in the second quarter, and suspended plans to expand its operations to Texas. And Argo Blockchain, a Nasdaq-listed company, recently received a delisting warning from Nasdaq after its stock price fell below $1 for 30 consecutive business days. 

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Why are these companies at risk?

Miners are on the brink of bankruptcy because the price of Bitcoin is falling, while energy costs are rising, which is depleting their liquidity.

The price of Bitcoin has fallen to 1/5 of its all-time high of nearly $69,000 recorded in November 2021. At the same time, energy costs have soared, and industry competition has intensified, which rapidly deteriorated the profit margin for mining companies. 

The current cost of producing Bitcoin is much higher than the current USD spot market value of BTC. According to January 12 data from MacroMicro (, the average cost of mining 1 BTC is $20,166, while the USD value is just $18,872. 

As this vicious cycle continues, many miners are going bankrupt or abandoning equipment operations due to deteriorating mining profitability, putting the price of Bitcoin under downward pressure again. Another source of headwind is the fact that Celsius, a crypto lender that filed for bankruptcy protection in July, was a key customer of Core. 

What will happen to the mining industry?

Cryptocurrency as a whole is in a recession, and the profitability of miners is on a long-term decline. As a result, the number of crypto-related companies suffering from financial difficulties is expected to increase further. Wolfie Zhao, an analyst at crypto consulting firm BlocksBridge, told Bloomberg that “miners are attempting to deleverage to avoid a margin call or impending liquidity crisis if Bitcoin falls below a certain price level”. 

Ethan Vera, COO of mining services firm Luxor, also told CoinDesk that “ASIC financiers are experiencing difficulties and bankruptcies, which will significantly increase the cost of capital in the space and contribute to capital depletion”. 

As the mining industry struggles, some outside companies have started to support the mining sector. Galaxy Digital supported Argo with $100 million, and Binance is raising funds for miners. Investment giant BlackRock has pledged $17 million for Core Scientific, a bitcoin miner in crisis. 

Some are also of the opinion that the difficulties faced by the Bitcoin mining industry will not have a significant impact on the price. According to, the reason for this optimism is that despite this series of bad news for the crypto market, the Bitcoin hashrate has maintained an upward trend over the past 12 months. 

The Bitcoin hashrate refers to the total amount of computing power needed on the network to mine Bitcoin. A higher Bitcoin hash rate means that more computational power is being deployed, which in turn means faster mining. The consequence is increasing mining difficulty. If mining difficulty increases, the supply of Bitcoin in the market decreases, which is often seen as an indicator of long-term price growth. 

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