Bitcoin mining powers network transactions and BTC price. During the 2021 bull run, some mining operations raised funds against their Bitcoin ASICs and BTC reserves.
Miners also preordered ASICs at a hefty premium and some raised funds by conducting IPOs.
As the crypto market turned bearish and liquidity seized within the sector, miners found themselves in a bad situation and those who were unable to meet their debt obligations were forced to sell the BTC reserves near the market bottom or declare bankruptcy
Notable Bitcoin mining bankruptcies in 2022 came from Core Scientific, filing for bankruptcy, but BTC’s early 2023 performance is beginning to suggest that the largest portion of capitulation has passed.
Despite the strength of the current bear market, a few miners were able to increase production throughout 2022 and on-chain data shows Bitcoin miner accumulation began to increase in December 2022 and momentum appears to be continuing into 2023.