{"id":43795,"date":"2025-08-24T14:46:40","date_gmt":"2025-08-24T14:46:40","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=43795"},"modified":"2025-08-24T14:46:40","modified_gmt":"2025-08-24T14:46:40","slug":"bitcoin-mining-faces-incredibly-difficult-market-as-power-becomes-the-real-currency","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=43795","title":{"rendered":"Bitcoin Mining Faces ‘Incredibly Difficult’ Market as Power Becomes the Real Currency"},"content":{"rendered":"
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Jackson Hole, Wy. \u2014 Bitcoin miners have long been defined by the boom-and-bust rhythm of the four-year halving cycle. But the game has now changed, according to some of the industry\u2019s most prominent executives at the SALT conference in Jackson Hole earlier this week.<\/p>\n

The rise of exchange-traded funds, surging demand for power, and the prospect of artificial intelligence (AI) reshaping infrastructure needs mean that miners must find ways to diversify or risk being left behind.<\/p>\n

\u201cWe used to come here and talk about hash rate,\u201d said Matt Schultz, CEO of Cleanspark. \u201cNow we\u2019re talking about how to monetize megawatts.\u201d<\/p>\n

For years, mining companies\u2014which derived their main source of revenue solely from mining bitcoin\u2014lived and died by the four-year bitcoin halving cycle. Every cycle, rewards were slashed in half, and miners scrambled to cut costs or scale up to survive. But that rhythm, according to these executives, no longer defines the business.<\/p>\n

\u201cThe four-year cycle is effectively broken with the maturation of bitcoin as a strategic asset, with the ETF and now the strategic treasury and whatnot,\u201d Schultz said. \u201cThe adoption is driving demand. If you read anything about the most recent ETF, they’ve consumed infinitely more bitcoin than have been generated so far this year.\u201d<\/p>\n

Cleanspark, which now operates 800 megawatts of energy infrastructure<\/a> and has another 1.2 gigawatts in development, has begun turning its attention beyond proof-of-work. \u201cOur speed to market with the electricity has created opportunities such that now we can look at ways to monetize power beyond just bitcoin mining,\u201d he said. \u201cWith 33 locations, we now have a great deal more flexibility than we ever did before.\u201d<\/p>\n

A brutal business<\/h2>\n

Schultz is not alone in calling the industry’s monumental shift in business model.<\/p>\n

Patrick Fleury, CFO of Terawulf, echoed the sentiment and didn\u2019t try to sugarcoat the profit squeeze the miners are now feeling.<\/p>\n

\u201cBitcoin mining is an incredibly difficult business,\u201d he said. He broke down the economics of bitcoin mining in straightforward terms: with electricity priced at five cents per kilowatt hour, it currently costs around $60,000 to mine a single bitcoin. At a bitcoin price of $115,000, that means half the revenue is consumed by power alone. Once corporate expenses and other operating costs are factored in, the margins tighten quickly. In his view, profitability in mining hinges almost entirely on securing ultra-low-cost power.<\/p>\n

For Fleury, the deeper problem isn\u2019t just power costs \u2014 it\u2019s the relentless expansion of the network itself, driven by hardware manufacturers with little incentive to slow down.<\/p>\n

He pointed to Bitmain, which continues to produce mining rigs regardless of market demand, thanks to its direct pipeline to chipmakers like TSMC. Even when miners aren\u2019t buying, the company can deploy the machines itself in regions with ultra-cheap electricity \u2014 from the U.S. to Pakistan \u2014 flooding the network with hash power and driving up mining difficulty. That global footprint, coupled with low production costs, allows Bitmain to remain profitable while squeezing margins for everyone else.<\/p>\n

Still, Terawulf is pivoting aggressively. Last week, it signed a $6.7 billion lease-backed deal<\/a> with Google to convert hundreds of megawatts of mining infrastructure into data center space.<\/p>\n

\u201cThese things, as everyone can attest to up here, like electrical infrastructure, don\u2019t move quickly,\u201d Fleury said. \u201cTech is used to moving quickly and breaking things, but these deals take an extremely long time to come together. It took us four to five months of very intense due diligence.\u201d<\/p>\n

\u201cWhat I take the most pride in in that transaction was really working collectively with those partners to come up with a new mousetrap that I hope now becomes something that the industry can duplicate at other companies,\u201d he said. \u201cGoogle is providing $3.2 billion of backstop lease obligation support to Terawulf, which effectively allows me to go out and secure financing at a really efficient cost of capital.\u201d<\/p>\n

Profitability\u2014or Patience<\/h2>\n

Kent Draper, chief commercial officer at IREN, took a quieter but confident stance. His company mines bitcoin profitably \u2014 even today, he said. Still, he pointed to one common denominator: power.<\/p>\n

\u201cBeing a low-cost producer is fundamentally important, and that’s how we’ve always focused our business \u2014 having control of our sites, having operational control, being in areas that are low-cost power jurisdictions,\u201d Draper said.<\/p>\n

Iren, according to him, is currently operating at 50 exahash, which translates to a billion-dollar annual revenue run rate under current bitcoin market conditions. He noted that the company\u2019s gross margins \u2014 revenue minus electricity costs \u2014 stand at 75%, and even after accounting for corporate overhead and SG&A expenses, IREN maintains a 65% EBITDA margin, or roughly $650 million in annualized earnings.<\/p>\n

Still, even IREN is pausing its expansion in mining. \u201cThat\u2019s really dictated just by the opportunity set that we see on the AI side today and the potential to really diversify the revenue streams within our business, rather than a fundamental view that bitcoin mining is no longer attractive,\u201d Draper said.<\/p>\n

On the AI side, IREN is pursuing both co-location and cloud. \u201cCapital intensity is very different,\u201d Draper said. \u201cIf you’re owning the GPUs on top of the data center infrastructure, that\u2019s 3x the investment. On the cloud side, the payback periods tend to be a lot faster\u2014typically around two years on the GPU investment alone.\u201d<\/p>\n

Holding bitcoin \u2014 and the Line<\/h2>\n

For Marathon Digital (MARA) CFO Salman Khan, survival is about agility. With decades in the oil industry, Khan sees a familiar pattern: boom, bust, consolidation, and the constant race to stay efficient.<\/p>\n

\u201cThis reminds me of those trends in commodity-exposed cycle industries,\u201d Khan said. \u201cThere are some very wealthy families in the oil sector who made billions, and then there are others who have filed bankruptcies. You have to have a strong balance sheet to survive these cycles.\u201d<\/p>\n

Marathon holds bitcoin on its balance sheet \u2014 something Khan said paid off. \u201cWe’re not a treasury company, we’re not Strategy, but we like to have that hedge if bitcoin price escalates.\u201d<\/p>\n

More recently, Marathon announced a majority stake in Exaion<\/a>. \u201cThe angle that we have on the AI front is compute on the edge,\u201d Khan said. \u201cWe like sovereign compute, which allows people to control their data better at a closer location to them. We like the aspect of recurring revenues that come with that. We also like that there’s a software aspect to it, and also the platform aspect to it.\u201d<\/p>\n

Beyond bitcoin, behind the grid<\/h2>\n

Despite the different points of view and strategies, it all comes down to one common factor: power. Whether it was being used to mine bitcoin, power AI, or balance electrical grids, energy \u2014 not hash rate \u2014 was the currency of the conversation.<\/p>\n

\u201cWe curtail our energy consumption for 120 hours a year,\u201d CleanSpark’s Schultz said. \u201cWe can avoid about a third of our total energy costs. So being that flexible load matters.\u201d<\/p>\n

Cleanspark, he added, has spent the past year quietly locking up megawatts around the country. \u201cYou mentioned Georgia,\u201d Schultz said. \u201cWe have 100 megawatts surrounding the Atlanta airport. That\u2019s a prime example. We\u2019ve been focused on being the valuable partner for some of these rural utilities to monetize stranded megawatts.\u201d<\/p>\n

Still about bitcoin \u2014 for now<\/h2>\n

Despite the growing focus on AI, the panelists made it clear that bitcoin remains central to their businesses \u2014 for now. When asked why mining companies still deserve investor attention, the answers pointed to scale, cost efficiency, and the ability to weather volatility.<\/p>\n

Fleury emphasized that Terawulf\u2019s contracted power capacity could generate substantial cash flow, comparing the economics to established data center operators. Khan pointed out a disconnect between Marathon\u2019s bitcoin holdings and its market valuation, suggesting that the core mining business is being overlooked. Draper underscored IREN\u2019s operational efficiency and low-cost footprint, citing recent performance metrics that placed the company ahead of other public miners.<\/p>\n

And while the future may include cloud infrastructure and edge compute, Schultz argued that bitcoin itself could still evolve into something larger \u2014 a foundational layer for energy systems. As he put it, the next phase may not be about speculation, but about bitcoin’s role in helping balance power networks.<\/p>\n

Read more: Bitcoin Mining Costs Soar as Hashrate Hits Records: TheMinerMag<\/a><\/em><\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Jackson Hole, Wy. \u2014 Bitcoin miners have long been defined by the boom-and-bust rhythm of the four-year halving cycle. But the game has now changed, according to some of the industry\u2019s most prominent executives at the SALT conference in Jackson Hole earlier this week. The rise of exchange-traded funds, surging demand for power, and the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-43795","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/43795","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=43795"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/43795\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=43795"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=43795"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=43795"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}