Miners in tight spot as post-halving takes dent on revenue

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Block reward mining profitability is under severe pressure in 2025, driven by the 2024 Bitcoin halving and escalating energy costs. The halving slashed block rewards to 3.125 BTC, while global mining difficulty reached a record 123T, pushing the hash price to a low of $0.049 per terahash per second. For many miners, operational costs now exceed revenue, with some United States operations facing costs of up to $137,000 per Bitcoin—far above market prices of $100,00–$111,000.

Energy costs, which can account for 80% of operational expenses, are the primary challenge. In regions like Oman, subsidized electricity rates of $0.035 per kilowatt-hour enable profitability, but miners in Europe or parts of North America face rates as high as $0.20 per kWh, rendering operations unsustainable without significant efficiency gains. Upgrading to advanced rigs like MicroBT’s WhatsMiner M66S+ is a common strategy, but the high upfront cost—often exceeding $10,000 per unit—limits accessibility for smaller miners.

Financial strain has forced drastic measures. Firms like Riot Platforms (NASDAQ: RIOT) sold $38.8M in BTC in December 2024 to cover expenses, reflecting a broader trend of liquidating reserves to stay afloat. Smaller miners, unable to absorb losses, are exiting the industry or being acquired by larger players like Marathon Digital (NASDAQ: MARA), which are scaling hash rates to offset reduced rewards through economies of scale.

To mitigate losses, miners are diversifying revenue streams. Some are leasing excess computing power for artificial intelligence (AI) or cloud computing, leveraging existing infrastructure to generate stable income. Others are investing in renewable energy sources to lower costs, though scaling such solutions requires significant time and capital. The profitability crisis underscores the need for relentless innovation, as miners must balance immediate financial pressures with long-term strategies to remain viable in a hyper-competitive landscape.

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