Texas’ bitcoin toss

Despite slump and bankruptcies, crypto lovers push state as mining capital

Cryptocurrency miners began flocking to Texas in the past five years, drawn by the state’s low energy costs and relaxed regulations. As they began setting up shop, lawmakers and local officials were touting the boom as an economic lifeline for the state’s struggling rural communities where many landed.

Nearly 30 crypto mines set up shop in Texas, big data centers that consume tremendous amounts of energy to run banks of computers humming away to mine new bitcoins.

But now, many — if not most — are struggling to stay afloat amid the plummeting value of the commodity they create and soaring electricity costs.

“Bitcoin miners are operating under the very slimmest of margins right now,” said Lee Bratcher — president of the nonprofit Texas Blockchain Council. “There are not many bitcoin miners that are making profits similar to what we would have seen. The bitcoin mining industry, as a whole, is tightening the belt.”

That’s a big turnaround from 2021, when bitcoin’s value peaked at $68,000 and miners collectively earned more than $60 million a day, according to data from Blockchain.com. By the end of 2022, the value had plummeted to less than $17,000 — and miners’ take was $10 million a day. As a result, mining companies that borrowed millions to set up during the bull run now are facing uncertain futures. Several have gone bankrupt. Others are trying to sell off assets. Some have started returning equipment to bankers who financed it.

Shares in Riot Platforms Inc., which operates the state’s largest bitcoin mine northeast of Austin,

Jordan Vonderhaar/Bloomberg An attendee takes a picture last year of a replica bitcoin mine at the CoinDesk 2022 Consensus Festival in Austin, which showcased blockchain’s impacts and uses.

Trace Thomas/For The Texas Tribune Employees service a computer at Helios, a 125,000-square-foot crypto mining facility in Dickens County.