What Is the Risk to a Miner’s Profit If the Price of the Cryptocurrency Drops Sharply?
A sharp drop in the cryptocurrency's price directly reduces the fiat value of the miner's revenue, which consists of the block reward and transaction fees. This can quickly push a miner's operations below their break-even point, especially for those with high electricity or hardware costs.
To remain profitable, miners may have to shut down less efficient machines, leading to a drop in the network's total hash rate.
