The prices of bitcoin mining rigs – hardware machines used to verify and add new blocks to the Bitcoin blockchain – have slid to near their all-time lows in the past year due to falling profitability, and miners are taking advantage of this opportunity to stay ahead of the competition.

Profitability has been on the decline as a result of bitcoin price volatility, higher energy costs, hashrate growth and increasing network difficulty. When the rigs make less money, the prices of the machines themselves decline, Colin Harper, content head at Luxor Mining, told CoinDesk.

This story is part of CoinDesk’s 2023 Mining Week, sponsored by Foundry.

The newest generation of mining rigs, which use 25 joules of energy or less per terahash (TH) of computing power, including the Bitmain’s S19 XP and WhatsMiner M50S series, have seen prices drop by 66% to $20 per terahash from $60 per TH since July 2022, according to Luxor Mining’s Hashrate Index data. Mining rig prices are often quoted in dollars per terahash of mining power.

Read more: How Does Bitcoin Mining Work?

Prices for older bitcoin mining rig models are also dropping, according to the data.

Mining rigs are getting cheaper mainly due to a decline in bitcoin’s hashprice, the revenue miners generate per terahash of computing power. This measure of profitability, which factors in Bitcoin’s network difficulty, price, energy costs, block subsidies and transaction fees, has been “choppy and steadily decreasing” in the past year, Harper said.

Read more: The Ever More Efficient Bitcoin Mining Machine

The fall in prices for mining rigs comes as miners are gearing up for the fourth Bitcoin halving, expected in April 2024. A halving is a highly anticipated event that takes place roughly every four years, where the reward for successfully mining a bitcoin block is cut in half.

This reduction is designed into the blockchain’s codebase to control its supply economics. Eventually, the rewards reach zero as the number of bitcoins mined approaches its pre-designated 21 million block cap. The next halving is expected to lower the reward to 3.125 BTC per block from the current 6.25 BTC.

Read more: Bitcoin Halving, Explained

The miners, facing almost double the mining cost overnight to achieve the same revenue once the halving occurs, will need more efficient machines to keep down costs.

Currently it costs around at least $10,000-$15,000 per bitcoin to profitably mine a block. After the halving, the cost could rise as high as $40,000 per bitcoin, according to some analysts, making the most efficient machines a necessity.

The drop in prices for the newer-generation models seems to have provided opportunities for some miners to scoop up the machines they’ll need to stay profitable after the halving. For example, in April, CleanSpark purchased roughly $145 million worth of Bitmain Antminer S19 XPs.

Read more: Bitcoin Halving Is Coming and Only the Most Efficient Miners Will Survive

As the miners come to realize the need to use newer generation machines heading into the halving, prices of these computers – clocking an efficiency of under 25 J/TH – are starting to tick up. According to Luxor data, prices for these rigs have increased 5% in the past month or so.

Luxor’s Harper said miners will opt for newer mining rigs with higher efficiencies and computing power compared to older models.

Eliza Gkritsi contributed reporting.