The Math Behind the $87K Trap | Miner Death Spiral Looms
Edited By
Oscar Martinez
As Bitcoin approaches $87,000, concerns about a potential liquidity crisis in crypto mining industries are escalating. With alarming indicators signaling a downturn, experts assert that miners face dire financial challenges ahead.
Profitability in Jeopardy
Current market analysis reveals a striking discrepancy in miner revenue. Despite Bitcoin's price surge, profitability has plummeted. Revenue per block has dropped from approximately $375,000 at $60,000 to $271,000 at $87,000, marking a 28% decline in USD terms. At the same time, the hashrate is at an all-time high, while energy costs have increased by 15-20%. "The bottom 30% of miners are underwater," reports one financial analyst, noting that many struggle to survive solely on loans.
Rising Operational Pressures
As December 2025 approaches, mining companies must balance their books for the fiscal year. Increased operational expenses during the colder months complicate matters. The combination of factors—year-end financial scrutiny, soaring expenses, and the impending liquidity crunch—could trigger a forced selling event. Weak miners are expected to liquidate Bitcoin reserves to cover debts, ultimately endangering the entire network.
"Cash is king right now," says another commentator, urging caution in the face of economic uncertainty.
Two Possible Outcomes
Scenario A: Immediate Crash
The most likely outcome is a significant price drop between $30,000 and $40,000 due to the combined effects of post-halving revenue declines and mounting financial pressure. This scenario risks bankruptcies across the sector, threatening the livelihoods of countless miners.
Scenario B: Delayed Collapse
Alternatively, if miners manage to keep operating through market manipulation, they may only postpone the inevitable collapse leading into the 2028 halving. Without substantial market support pushing prices above $300,000, the entire mining infrastructure could become untenable, setting the stage for a catastrophic crash.
Broader Economic Implications
This situation isn’t just a crypto concern. A mining collapse could trigger ripple effects in global semiconductor and energy markets, impacting industries like TSMC and Samsung. Experts are drawing parallels to past economic downturns, noting potential ramifications on the already fragile Chinese real estate platform—especially concerning Evergrande.
Key Insights:
▲ 28% drop in miner revenue as hashrate surges.
▼ Forced sales of Bitcoin looming as miners face operational pressures.
✦ Global recession warning: Possible parallels to 1929 or 2008 fallout.
In this tense climate, many in the crypto community are left pondering the future of Bitcoin and their investments. The upcoming months may prove critical in determining not just Bitcoin's fate, but the landscape of the entire cryptocurrency market.
Coming to Terms with Financial Reality
There’s a strong chance that the impending liquidity crisis will push Bitcoin's price down to between $30,000 and $40,000 in the near future. Experts estimate around a 70% probability of significant bankruptcies occurring among miners, primarily due to their inability to cover rising operational costs and debts. As weaker players are forced to sell Bitcoin reserves, it could create a cascade effect, further straining the market. Without intervention or a substantial surge in price above $300,000, the viability of the entire mining sector appears precarious. The road ahead hinges on how effectively miners adapt to this financial whirlwind and whether external market factors can provide the necessary support to stabilize prices.
A Parallel in the Stock Market
In the late 1970s, the U.S. faced a deeply troubling period marked by high inflation and economic instability—much like today’s pressures in the cryptocurrency sector. Investors witnessed a surge in prices without any real value backing them, leading many to take desperate measures just to stay afloat. Similar to the miners today grappling with rising energy costs and plummeting revenue, many companies then were forced to liquidate assets to manage their financial burdens. Just as the aftermath reshaped investment strategies and market regulations, the current crisis in crypto mining may lead to a rethinking of industry standards and practices, emphasizing long-term sustainability over volatile profits.