Looking at the bitcoin price relative to the bitcoin production cost, we see that profit margins have taken a massive hit in recent months. Given a bitcoin price of $31k, the Antminer S19 has a cash flow per BTC of $23k, which is not bad, but we should remember that this number was more than $50k at the peak in November. Things look worse for the S9, which has a cash flow of only $8k per BTC.
The falling profitability of mining has led many to speculate in increasing M&A activity, and potentially even some bankruptcies going forward. To gauge which miners are the best prepared to get through the bear market and even potentially capitalize on it by buying assets of distressed competitors, it's essential to look at two factors: each company's bitcoin production cost and the strength of their balance sheets.