Marathon Digital CEO: Bitcoin Mining Is Becoming Unprofitable

Fred Thiel, CEO of mining company Marathon Digital Holdings (MARA), called Bitcoin mining a complex and evolving industry, where only those miners with easy access to electricity and who can employ innovative business strategies will be able to thrive.

Thiel acknowledged that many miners are currently struggling due to fierce competition, rising electricity demand, and declining profits. The MARA director called mining a “zero-sum game,” explaining that the more people join, the more difficult it becomes for participants. This means that due to the halving, which occurs every four years, miners receive less profit, but their electricity costs remain the same, and these are only minimal expenses.

For this reason, large mining companies are shifting their focus to related areas, such as artificial intelligence (AI) or high-performance computing (HPC), Thiel explained. Many miners find it difficult to compete with companies that operate their own hardware at minimal cost. This includes major mining equipment manufacturers and companies like Tether, which have extensive resources.

The head of MARA warned that the situation for miners could worsen after the upcoming Bitcoin halving in 2028. By that time, the block reward will drop to 1.5 BTC. If transaction fees don't increase and the Bitcoin price doesn't grow by at least 50% annually, mining could become unprofitable. Thiel fears that in 2032, miners will face even more difficulties.

“By 2028, miners will have to generate their own electricity, become part of power generating companies, or form strategic alliances with them. The era of miners connected directly to the power grid is over,” Thiel said.

Previously, the head of MARA proposed that the US government replenish the national cryptocurrency reserve through Bitcoin mining rather than through purchases, otherwise creating a strategic reserve in BTC would be pointless.

Источник: cryptocurrency.tech