Bitcoin’s price slide pushes most miner rigs into the red

The prolonged downturn in Bitcoin’s market value, coupled with persistently high global energy costs, has triggered a significant profitability crisis within the cryptocurrency mining sector. As BTC prices test crucial support levels, the operational costs for a vast portion of the mining fleet now exceed their revenue, effectively pushing these operations “into the red.”

**Escalating Breakeven Points**

The primary drivers of this crisis are twofold: Bitcoin’s spot price decline (which reduces revenue) and increasing mining difficulty (which demands greater computational power for the same reward). For many older generation application-specific integrated circuit (ASIC) rigs, such as the Bitmain Antminer S9 series, the cost of electricity alone now surpasses the value of the Bitcoin mined. Even mid-tier efficiency machines, which were profitable just six months ago, are nearing their shutdown price, particularly those operating in regions with commercial electricity rates exceeding $0.07 per kilowatt-hour (kWh).

**Miner Capitulation Underway**

Industry analysts estimate that a significant percentage of the global hash rate is currently being generated at a loss. This pressure forces immediate action from less capitalized miners: either shutting down the rigs entirely (known as miner capitulation) or liquidating their Bitcoin reserves to cover operating expenses. This dynamic creates a temporary downward pressure on the BTC price while simultaneously purging the network of its least efficient participants.

**Impact on Network Security**

While the forced shutdown of rigs temporarily lowers the overall network hash rate, large, highly capitalized public mining companies running the latest S19 Pro and similar energy-efficient models are generally able to weather the storm. This consolidation event suggests that while individual miners suffer, the overall security and efficiency of the Bitcoin network ultimately improve, resetting the industry for the next bull cycle.

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