The cryptocurrency has been hurt by falling bitcoin prices and rising energy costs

At the end of 2021, the price of one bitcoin exceeded $65,000. Since then, the price has fallen 70%, taking away the fortunes of the once-thriving cryptocurrency industry.

These transactions, which generate bitcoin and other cryptocurrencies, often use vast stacks of computers that require a ton of electricity to run.

Some states and municipalities have been competing to attract this industry for years. Others have been less welcoming, which critics argue are damaging clean energy goals in the country and around the world.

At CES in Las Vegas this month, the cryptocurrency contingent wanted to show they weren’t worried about the present.

Speakers at the “How to Stay Warm in Crypto Winter” panel were introduced as follows: “These are not the individuals who jumped during all the craziness of the last two years.”

In other words: There are no crypto tourists here “but there are indeed cryptocurrencies”.

This crypto winter began early last year, months before FTX collapsed in November and founder Sam Bankman-Fried was arrested.

From the CES convention floor, Sheila Warren, CEO of industry group the Crypto Council on Innovation, acknowledged that these events didn’t help public perception.

Still, “What I see here, certainly at CES, is that it’s not going away,” he said. “It’s definitely here to stay.”

But the industry is certainly in trouble. This is especially true for businesses that monetize cryptocurrencies. In North America, shares of many of these firms have collapsed by 90% or more over the past year.

“The biggest thing is probably the price of bitcoin in general. It’s a radically different business when your revenue is down 70%,” said Ben Gagnon, chief mining officer at Bitfarms mining operation in Canada.

Meanwhile, the cost of basic access has risen as the global energy crisis unfolds, said Ben Harper of Luxor Technologies, which provides software services to the industry.

“You have this huge increase in electricity prices over the last year, and it’s a squeezed margin on the cost side,” Harper said.

Back when times were good, cryptocurrency farms were mostly hoarding money for mining computers. Stacks of them would be installed in a large and very noisy facility in Massena, New York, that Marketplace visited a year ago.

Luxor’s Harper added that more cars are chasing the same prize these days. “The higher the number of stablecoins, the less revenue there is for any given miner,” he said.

Their collective crash was hailed by environmental groups organizing against energy-intensive crypto-mining.

In upstate New York, the Seneca Lake Guardian group helped push for the country’s first statewide partial moratorium on new cryptocurrency production, arguing that the projects conflict with New York’s carbon reduction goals.

A bitcoin mining facility is seen in Niagara Falls, New York in October 2022. The state adopted a partial moratorium on the production of new cryptocurrencies at the end of last year. (Geoff Robins/AFP via Getty Images)

Yvonne Taylor said the struggles of cryptocurrency helped her group win a local fight against a cryptocurrency miner who worked at a fossil fuel power plant in her community.

“It’s pretty validating because we’ve been sounding the alarm and shouting our concerns about this facility for years,” Taylor said.

North of the border, two Canadian provinces, Manitoba and Quebec, are using different tactics to limit cryptocurrency mining.

While there are still some green pastures for miners, including states that offer them subsidies, crypto investor Bradley Tusk of Tusk Ventures warns that the industry needs a wake-up call.

“They need to improve politically. If they don’t start being smarter, more proactive and more aggressive, they will be completely banned from doing what they are doing,” Tusk said.

Tusk added that this is true for cryptocurrency miners and the cryptocurrency industry as a whole. “If you don’t step up, you will perish.”

While there is new legislation to crack down on cryptocurrency mining nationally, for opponents like Earthjustice senior attorney Thomas Cmar, efforts against the industry have largely been a state-by-state battle.

“They chase electricity prices,” Smar said. “No matter where they come from, they want to use large amounts of electricity at a very critical time for our country’s climate policy.”

Cmar said that even after a difficult year, there is still a lot of cryptocurrency activity. If cryptocurrencies lose in one state or province, many are ready to rally and move to another.

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