Bitcoin’s mining industry is feeling the strain as profitability plunges to its lowest point in months, forcing many operators to weigh shutdowns or strategic pivots.
Key Takeaways:
Bitcoin’s hash price has dropped to around $42 per PH/s, nearing break-even levels that threaten smaller mining operations. High energy costs and reduced block rewards are squeezing margins, prompting miners and manufacturers to pivot toward AI. Major firms like Cipher Mining and IREN are diversifying, securing multi-billion-dollar AI infrastructure deals with Amazon and Microsoft.The sector’s key performance metric, the hash price, or daily revenue per unit of computational power, has fallen to around $42 per petahash per second (PH/s), edging closer to the break-even threshold that could drive smaller miners offline.
Bitcoin Hash Price Nears $40 as Miners Struggle to Stay Profitable
The hash price has been in a steady downtrend since July, when it briefly touched $62 per PH/s, according to TheMinerMag.
With the metric now hovering near $40, analysts warn that weaker miners are on the brink, while even larger firms are tightening spending to preserve margins amid high power costs and declining Bitcoin prices.
The impact extends across the mining supply chain. Hardware providers are reporting slower sales as struggling miners delay or cancel orders.
Those selling machines or services priced in Bitcoin are facing additional losses following the sharp drop in BTC’s value after the October market correction.
Manufacturers such as Bitdeer have turned to self-mining to offset declining hardware demand, while others are refocusing their business models toward AI and high-performance computing (HPC), sectors offering stronger margins than traditional mining.
The shift marks an accelerating trend as the economics of Bitcoin mining become increasingly unforgiving.
Following April’s Bitcoin halving, which cut block rewards from 6.25 BTC to 3.125 BTC, competition has intensified further.
The Bitcoin network’s total hashrate has surged past 1 zetahash per second (ZH/s) for the first time, pushing electricity and hardware requirements higher than ever.
Once a hobby run on personal computers, Bitcoin mining now demands industrial-scale operations using advanced ASIC machines. But as profit margins thin, several mining firms are finding greater stability in the AI infrastructure market.
In October, Cipher Mining signed a $5.5 billion, 15-year deal with Amazon Web Services to provide computing power, while IREN inked a $9.7 billion agreement with Microsoft in November for GPU-based AI services.
US Lawmaker Calls for National Security Probe Into China-Linked Bitcoin Mining Firms
In September, Congressman Zachary Nunn asked the US Treasury to launch a national security review of Chinese firms Bitmain and Cango, citing concerns over their expanding presence in the US crypto mining sector.
In a letter sent to Treasury Secretary Scott Bessent, Nunn pointed to opaque ownership structures, potential state ties, and risks to national infrastructure as grounds for a Committee on Foreign Investment in the United States (CFIUS) investigation.
Bitmain, which dominates over 80% of the global Bitcoin mining hardware market, and Nasdaq-listed Cango have both denied any merger plans.
Still, Nunn raised alarms over their growth strategies in the US, complex financing arrangements, and possible involvement in US energy infrastructure.
His concerns follow a $300 million equipment deal between Bitmain’s US arm and a Trump-linked mining firm.
Both companies have stated they comply with US laws and have no ties to foreign governments.
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