I just looked at the numbers, and the situation for Bitcoin miners looks quite complicated right now. The price hovers around $73,000, but production costs remain close to $87,000. That is, many miners are operating at a loss.

To understand what mining Bitcoin is, basically it is solving complex mathematical problems to validate transactions and secure the network. But when you understand the Bitcoin mining process and see these numbers, you realize why we are seeing capitulations. Miners simply cannot sustain profitable operations when the price is so far below the costs.

The interesting thing is that this has happened before. When the price does not cover the cost of mining Bitcoin, many operators withdraw, which reduces the network difficulty. But for now, it seems we are still in tough territory for most producers.