Has bitcoin’s time come and gone?

LAS VEGAS, NV - JANUARY 08: A general view of the Bitcoin booth at the 2015 International CES at the Las Vegas Convention Center on January 8, 2015 in Las Vegas, Nevada. CES, the world's largest annual consumer technology trade show, runs through January 9 and is expected to feature 3,600 exhibitors showing off their latest products and services to about 150,000 attendees. (Photo by Ethan Miller/Getty Images) less LAS VEGAS, NV - JANUARY 08: A general view of the Bitcoin booth at the 2015 International CES at the Las Vegas Convention Center on January 8, 2015 in Las Vegas, Nevada. CES, the world's largest annual ... more Photo: Ethan Miller, Getty Images Photo: Ethan Miller, Getty Images Image 1 of / 1 Caption Close Has bitcoin’s time come and gone? 1 / 1 Back to Gallery

As Bitcoin hit its lowest level since the spring of 2013 last week — less than 20 percent of its December 2013 peak of about $1,200 — its downward spiral suggests that confidence in the virtual currency is dwindling.

Bitcoin wrapped up the week with a price of $208.90 Friday, according to CoinDesk. With no signs of a rally in the offing, the industry is bracing for the effects of a prolonged decline in prices. In particular, bitcoin mining companies, which are essential to the currency’s underlying technology, are flashing warning signs.

“Will people lose confidence? Absolutely,” said Greg Schvey, a partner at TradeBlock, which provides data on virtual currency.

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For the most part, bitcoin supporters are quick to dismiss the currency’s yearlong slide, saying the price — and the volatility — is only one aspect of the virtual currency. Paying attention to price, they say, ignores the importance of bitcoin’s underlying technology, which is agnostic to its market value.

Still, the industry is starting to feel the effects of the sustained decline. Some mining companies that invested heavily in resources when the price of bitcoin was rising are struggling to keep their operations open.

“It obviously makes the environment for bitcoin businesses difficult,” said Jonathan Levin, a digital currency consultant.

Bitcoin miners are computers that run bitcoin’s open-source program and perform complex algorithms. If they find the solution before other miners, they are rewarded with a block of 25 bitcoins — essentially “unearthing” new bitcoins from the digital currency’s decentralized network. Such mining operations, though potentially lucrative, are also very expensive, requiring huge amounts of equipment and electricity.

Now, these miners, who had bet on a higher price of the virtual currency to pay for resources, are selling their bitcoins to keep their electricity running and return money to their lenders.

“People have these very real fiat-based liabilities that they have to pony up for, and to do that, they’re going to have to sell bitcoins,” Schvey of TradeBlock said. These sales could in turn be driving down the price further.

One company, CEX.io, said last week that it had temporarily shut down its cloud mining operations, a move driven in part by decline in bitcoin’s price.

“Taking into consideration our users’ interests, the recent Bitcoin price drop, as well as the upscaling of the mining difficulty, CEX.io Bitcoin exchange would like to announce a temporary suspension of cloud mining services provided by the platform at the time of the next difficulty increase,” the company wrote in a blog post.

And CoinTerra, a mining startup in Texas, is being sued in Utah by C7 Data Centers, a data center operator, accusing it of breach of contract over $1.4 million in owed payments, according to a court filing.

“CoinTerra disputes the allegations in the complaint filed by C7 Data Centers in Utah State court,” CoinTerra said. “Moreover, CoinTerra has filed a counterclaim against C7 in federal court in the District of Utah. CoinTerra intends to vigorously prosecute its claims against C7 while defending the claims levied by C7.”

CoinDesk reported last week that e-mails sent by CoinTerra to customers of its cloud mining business suggest that the company had defaulted on its debt obligations.

Other bitcoin startups, especially those dependent on price, may also be feeling the squeeze. And if the price continues to fall, investors may turn away from bitcoin companies, Levin said.

Even as the price of bitcoin declines, sentiment still appears to be positive. In the last year, the number of transactions has increased significantly.

“At the end of the day, what will be determinative of bitcoin being a success or failure is going to be whether people are using it,” said Patrick Murck, the executive director of the Bitcoin Foundation. “The day-to-day stuff with the price is kind of a sideshow.”