Hedge funds have been upping their short positions against shares of cryptocurrency miners, betting that more will go to the financial brink after the collapse of the FTX exchange.

With the bitcoin price down by nearly two-thirds this year and the cost of the power that miners require to fuel their energy-intensive computers having risen sharply, hedge funds are wagering that some companies’ business models are still far from viable.

Bearish investors have been betting that the implosion of Sam Bankman-Fried’s FTX will further deepen the malaise for a corner of the crypto market that expanded rapidly last year, often with borrowed money, in the hope of cashing in on high prices of tokens like bitcoin.

Miners, which use a network of powerful computers to solve cryptographic calculations in return for new tokens, face the constant need to upgrade their technology and are also highly dependent on the price of the cryptocurrencies they sell.

“Because crypto is trading vastly below where it was before, and they [miners] have a lot of expenses, it’s not clear they will ever be able to turn a consistent margin,” said Chris Crawford, chief investment officer at Crawford Fund Management in Boston, which runs a hedge fund for Eric Sturdza Investments and has been shorting some crypto miners. Shorting means betting that prices in the future will be lower.

Short interest in US group Marathon Digital, one of the largest US listed miners, rose sharply again last month to…