Industry participants say that lots of money was spent over the last year to boost hashrate, a measure of computing power on the Bitcoin network, but that in many cases, those investments didn’t pay off, as companies loaded up on debt to finance the growth only to see the economics of crypto mining break down.

"Many miners acted too deterministically," projecting bitcoin (BTC) would hit $100,000 and not even considering that the price would drop below $20,000, said Juri Bulovic, head of mining at crypto mining and staking firm Foundry, which is owned by CoinDesk’s parent company, Digital Currency Group.

With falling bitcoin prices, many companies had trouble meeting their debt obligations.