Miners struggle to stay afloat as profits drop and costs surge
The bitcoin mining industry is grappling with a profitability crisis, even as the cryptocurrency’s price hovers near all-time highs. With bitcoin trading around $84,000, many would assume that miners are raking in profits—but the reality on the ground tells a very different story.
At the heart of this disconnect is hashprice, a core metric that represents the expected revenue per unit of computational power (measured in PH/s). According to the HashRate Index, this figure has plunged to approximately $44.00 per PH/s, near its lowest level in five years. This downturn paints a stark picture of the challenges miners face in the wake of April’s halving event, which cut block rewards by 50%.
“Miners are earning less per unit of effort despite a historically high BTC price,” said industry analysts, highlighting a convergence of negative factors that include increased mining difficulty, diminished transaction fees, and soaring energy costs.
For some miners, current hashprice levels may still allow them to break even—depending on the efficiency of their equipment—but the days of 2021’s booming mining profits are clearly over. Many mining operations now face tighter margins and are exploring alternative uses for their infrastructure.
The Shift Toward Diversification
With core mining revenue under pressure, a number of mining firms are diversifying into adjacent fields such as artificial intelligence, repurposing their high-performance computing power to support AI workloads—a move seen as a hedge against volatile crypto economics.
Meanwhile, the financial markets are reflecting the sector’s struggle. The Valkyrie Bitcoin Miners ETF (WGMI) has plummeted nearly 50% year-to-date, a sharp contrast to bitcoin itself, which has only dropped around 10% over the same period. This performance gap underscores investor concerns about the sustainability of traditional mining business models.
Uncertainty on the Horizon
The outlook for the mining sector remains clouded. Beyond economic headwinds and stagnant BTC momentum, potential geopolitical risks—including tariffs that could impact mining equipment supply chains—add further layers of uncertainty.
As the crypto industry matures, mining may no longer be the golden ticket it once was. Success in the sector now appears to depend less on the price of bitcoin, and more on efficiency, innovation, and adaptability.