Energy costs are soaring, bitcoin's price is plummeting — and that's why big crypto miners are selling tokens at a discount

Major players in the industry are at risk of collapse as they struggle to remain profitable.

Publicly-listed companies are selling their mined token at a deep discount to repay their loans and cover rising operating costs, which could lead to the demise of the sector, according to analysts.

The EIA expects electricity prices to rise 5% this summer in the US due to higher prices for natural gas and coal.

After hitting an all-time high of $21,000 in November, the price of the virtual currency has plummeted.

The profitability of the companies has been hammered. They use a lot of energy to "mine" the token.

Alexander Neumueller, the project lead for Cambridge University'sBitcoin Electricity Consumption Index, told Insider that utilities make up almost all of the operating costs of the miners.

He said that they were facing rising costs and a decline in revenue.

Even though the price of the digital currency is at its lowest in 18 months, miners are trying to increase their profits by cutting costs and selling some of their holdings.

It is likely that companies with variable electricity rates will have to power off machines. It could be for a few hours or days.

A group of miners that used to hold all their coins have been forced to sell.

Marathon Digital has refused to rule out selling bitcoin for the first time in more than a year, even though Riot Blockchain sold 250 of the 466 bitcoins it mined in May.

The token's price is not moved meaningfully by the larger players. Some mining companies could collapse if their profits continue to fall or if they have taken out loans that are backed by the virtual currency.

During the bull market, many miners took out high-interest loans to fund their mine-to-hold strategy, according to the analyst. Some of these companies could be in danger of going under.

All eyes are on the mining companies that have taken out loans that are backed by the virtual currency. According to JP Morgan, these companies will have to keep selling at a discount.

If profitability doesn't improve, offloading of bitcoins by miners could continue into the third quarter.

Smaller players are likely to be squeezed out by the jump in energy costs and the slide in thecryptocurrencies market. According to Cambridge's Neumueller, hobbyists aren't likely to make a profit right now.

The industry is very competitive and there may be people who mine for ideological reasons. It's hard to imagine a person setting up machines in their house or garage to make money.

I was caught off guard by the crash, but I'm adjusting to it.