In 2025, Bitcoin mining faced its most severe profitability crisis in history. In the third quarter, the average hashprice was around $55 per PH/s per day, but after a sharp Bitcoin correction in November, this figure dropped to a structural minimum of $35 per PH/s. This situation creates systemic stress for miners, especially considering that the median hash cost for large public companies is about $44 per PH/s, which includes operational and corporate expenses.
Current State of Bitcoin Mining Profitability
The decline in profitability is also reflected in equipment payback periods. New installations of the latest generation require over 1000 days to recoup investments, significantly exceeding the approximately 850 days remaining until the next halving. This indicates growing financial risks for miners, even with efficient equipment use and favorable electricity rates.
Impact of the Upcoming Halving on Mining
The programmed halving event will reduce the block reward from 3.125 BTC to 1.5625 BTC. The roughly 850 days remaining until this event add further pressure on mining profitability. Miners are forced to adapt to new economic conditions, requiring a reassessment of business models and increased efficiency.
Financial Strategies of Mining Companies
In response to the crisis, companies are taking measures to strengthen their financial positions. For example, CleanSpark fully repaid its Bitcoin-backed credit line from Coinbase after raising over $1 billion through convertible bonds. In the third quarter, the industry raised about $3.5 billion through such zero-coupon convertible bonds and another $1.4 billion in equity. At the start of the fourth quarter, miners began raising funds through senior secured bonds with yields around 7%, with Cipher Mining and Terawulf securing nearly $5 billion to expand AI services.
Diversification and Shift to AI Services
Seven out of the ten largest miners already generate income from artificial intelligence and high-performance computing activities, with the rest planning to follow suit. Bitfarms announced a gradual phase-out of Bitcoin mining by 2027 and a transition to developing AI infrastructure. This trend reflects the industry's drive to diversify revenue sources and reduce dependence on the volatile profitability of mining.
Industry Outlook and Challenges
Despite growth in AI-related revenues, it is currently insufficient to offset the decline in hashprice and increasing debt load. The industry is in a phase of restructuring and adaptation, facing challenges of debt sustainability and the need to find new business models. Miners must closely monitor market changes and financial strategies to maintain competitiveness during the crisis.
Why This Matters
For miners with varying numbers of devices in Russia, the current situation means increased financial risks and the need to revise strategies. Falling profitability and extended payback periods require more careful planning of expenses and investments. The halving further reduces income, making the search for alternative revenue sources, such as AI services, highly relevant.
What Miners Should Do
- Assess the current profitability of their rigs and consider the growing payback periods when planning equipment upgrades.
- Monitor changes in block rewards and prepare for reduced income after the halving.
- Explore diversification opportunities, including participation in high-performance computing and AI projects.
- Pay attention to financial strategies of major companies and leverage their experience in reducing debt and raising capital.
