(Eliza Gkritsi/CoinDesk) In a recent piece titled “Crypto will be fine,” former CoinDesker Brady Dale noted that even though crypto has taken a beating throughout the year that was, there are some indicators that remain bullish. Notably, Bitcoin’s hashrate (how much computational power is directed towards securing the network) remains steadfast. “If the industry were dying, these miners should be winding down. They aren't,” Dale wrote. Indeed, according to Blockchain.com data, Bitcoin’s hashrate is just a ways off its all-time high set in November, 2022. Bitcoin’s hashrate rose steadily over the past 12 months even as the network’s token, bitcoin, lost over two-thirds of its value. For many, this is a sign of faith in the long term success of the world’s largest cryptocurrency network. Of course, there’s more to the story than a single statistic. As Compass Mining’s Zack Voell (another ex-CoinDesker) detailed in a Monday report, the Bitcoin mining industry took a series of beatings in 2022. In his catalog of “all of the bad things that miners suffered” found that at least four executives of major mining firms resigned over the year, six lawsuits have been filed against mining companies – for reasons stretching from breach of contract to zoning rule violations – and stocks for publicly-traded mining companies are in the doldrums. Additionally, two mining companies, Core Scientific and Compute North, filed for bankruptcy while Celsius and BlockFi, two bankrupt crypto lending firms with sizable mining wings, are likely going to have to restructure their operations. Another two mining companies, Marathon and Argo, are also at risk of declaring bankruptcy. The situations vary by firm, but the main causes of the issue stem from BTC’s depressed price and, often, poor treasury management. My colleague George Kaloudis simplified the picture by saying that over the last few years many mining companies pursued accelerated growth strategies financed by debt and other investments while often choosing to hold onto their mined coins. "Many miners acted too deterministically," projecting bitcoin would hit $100,000, Juri Bulovic, head of mining at crypto mining and staking firm Foundry, which is owned by CoinDesk’s parent company, Digital Currency Group, told CoinDesk’s Eliza Gkritsi. The situation worked well when bitcoin’s price was rising and the cost of financing expansion was cheap – two things thrown off course amid macroeconomic uncertainty and rising interest rates. Already, outside firms have been stepping in to backstop losses and inject much-needed capital into the lagging professional mining sector. Galaxy Digital struck a $100 million deal with Argo, Binance has spun up a fund for distressed miners and just today investment giant BlackRock committed $17 million to bankrupt bitcoin miner Core Scientific. Although the mining sector is in a precarious position – fueled in part by unprecedented deployment of state-of-the-art mining equipment order and deployed during the heady days of 2021, when bitcoin hit a high of $69,000 – the industry isn’t likely going to be wiped off the map. In addition to battle-tested firms deploying better treasury management, there are also a line of new financing options coming online – like derivatives options from Two Prime, which could allow miners to hedge their risk over mining bitcoin in a similar way as in other commodities markets like oil. More capitulation and bankruptcies could come, and unprofitable miners may be taken offline. But considering the global sprawl of the mining industry, the sectors’ committed activist investors and supporters and the growing importance of mining within the hydrocarbon and wider energy sector mining will remain. And the business might be better for its recent troubles. – D.K. | 