In October 2025, Bitcoin mining profitability plummeted to historic lows globally, despite the network hashrate hitting unprecedented highs, significantly impacting miners' operations.
This profitability drop forced miners to pivot towards AI and high-performance computing to mitigate profit challenges, altering market dynamics and signaling potential shifts in cryptocurrency mining models.
Industry Challenges and Strategic Shifts
Bitcoin mining profitability has plummeted to historic lows in October, even as the network's hashrate has reached unprecedented levels of about 1.05–1.1 ZH/s. This development has created significant pressure on the mining industry.
Key industry leaders and companies are evaluating their strategies. Marathon Digital's CEO, Fred Thiel, highlighted that post-2028 only miners with ultra-cheap power or diversified AI/HPC revenue can remain viable. Major players are currently adapting to these challenges.
Miners Shifting to AI and HPC Markets
The squeeze in mining has triggered an industry-wide shift. Companies like Bitfarms are transitioning to AI and high-performance computing to mitigate profit challenges. Malaysia's government reported discovering about 14,000 illegal mining setups.
The financial burden on miners has escalated, with industry debt soaring to about $12.7 billion. As mining profitability declines, firms are opting for AI investment for better returns. The regulatory landscape is also tightening, especially in Southeast Asia.
"After the 2028 halving, standard Bitcoin mining models will only be sustainable with very low-cost energy or diversified revenue streams such as AI infrastructure." — Fred Thiel, CEO, Marathon Digital
Despite challenges, firms are maintaining or increasing BTC reserves. Analysts indicate that the current economic model for miners may become untenable without shifts towards high-yield sectors. The industry's difficulties highlight possible technological evolutions.
Bitcoin mining costs are rising significantly, marking a trend that aligns with historical patterns, although today's conditions are more severe. Historical analysis suggests parallels with past cycles, but today's conditions are more severe. Predictive commentary notes that much of the current capacity could struggle post-2028, emphasizing the need for strategic diversification within the industry.