Few miners have defaulted on their loans so far, but recent sales are showing signs of distress. Core Scientific Inc. sold more than 2,000 Bitcoin in May to help cover operational costs. Meanwhile, Bitfarms Ltd. offloaded nearly half of its mined tokens earlier this month to pay down part of its $100 million loan with Galaxy Digital Holdings Ltd. It has also taken out another machine-backed loan from New York Digital Investment Group LLC.

The value of Bitmain’s popular S19 mining rig is down about 47% from a high of roughly $10,000 in November, according to data from Luxor Technologies Corp.

Vera estimates there’s up to $4 billion in loans backed by machines, which is on top of even more token-backed loans, first popularized in Asia with lenders like Babel.

If you factor in overhead costs for infrastructure and interest rates, the total costs for some miners may already be above $20,000, which is around Bitcoin’s current price, said Wilfred Daye, chief executive officer of Securitize Capital.

“Miners thought they would be in a better capital raising environment today,” Vera said. “They bought tens of thousands of machines, signed up for hosting, put the deposits down and now they can’t fulfill” obligations, he said.