Bitcoin Miners Squeezed as Record Hashrate Collides With Falling Prices

Miners Face a Severe Profit Squeeze

Bitcoin’s mining industry is entering one of its toughest economic phases in years as soaring network competition meets a weakening market. A new report highlights that miner profitability has dropped sharply due to an all-time-high hashrate and ongoing pressure on revenue, signaling that even the biggest players are now feeling the strain. With the BTC price sliding from recent highs and operational costs rising across the board, mining firms are being forced to rethink their strategy heading into 2025.

The latest data shows that Bitcoin’s hashrate surged to a record of approximately 1.16 zettahashes per second (ZH/s) in October, marking a historic milestone for network security but also dramatically raising the cost of earning block rewards. At the same time, Bitcoin’s value dropped into the low-$80,000 range, creating a double-squeeze that has left many miners operating on razor-thin margins.

According to TradingView and Farside Investors, this combination has driven the “hashprice”, the revenue earned per unit of computing power, to fall below $35 per petahash per second (PH/s), significantly lower than the industry’s median of around $45 per PH/s for publicly traded mining companies.

Bitcoin’s Hashprice has dropped to record lows, slipping under $35. Source: The Miner Mag

Record Hashrate vs. Shrinking Revenue

The record-breaking hashrate reflects massive investment into next-generation machines, larger facilities, and global expansion. While this is usually a sign of long-term confidence, the immediate financial impact has been difficult.

As more machines compete for the same number of blocks, rewards get split across a wider pool of miners. When coin prices fall simultaneously, revenue shrinks at a pace that is challenging even for well-capitalized companies.

Bitget’s most recent mining update noted that hashprice levels around $40 per PH/s represent some of the lowest profitability conditions miners have seen since early 2024. Meanwhile, electricity prices in major mining regions like the United States and Northern Europe have not softened enough to offset the revenue decline. This imbalance means many miners now face higher costs just to keep their rigs powered, cooled, and online.

ASIC Payback Periods Stretch Too Long

One of the clearest signs of strain in the mining sector is the soaring payback period for ASIC machines, which, according to recent mining-economics analysis from The Miner Mag, summarized by Bitbo, has now stretched beyond 1,200 days as hashprice falls below $35 per PH/s, far outside the healthy range for mining hardware.

Because mining machines lose efficiency over time and become less competitive as newer, faster hardware enters the market, a payback window this long is considered economically unsustainable for most operators.

Publicly traded mining companies, which must report revenue, debt, and operational expenses, face an additional layer of pressure from investors. Many of them expanded aggressively during earlier bull markets, taking on loans for equipment or infrastructure. With interest rates remaining high and cash flow tightening, that debt now weighs heavily on profitability. Some firms have already slowed expansion, postponed new site development, or shifted focus to revenue diversification.

A Turning Point for Mining Strategies as Margins Shrink

Faced with tightening margins, several mining firms have started repurposing parts of their infrastructure for new workloads such as high-performance computing, cloud services. and AI-related hosting. Recent industry reports show that this shift is gaining traction, but they also emphasize that these alternative revenue streams are still in the early stages and have not yet replaced the income miners are losing from declining hashprice and rising operational costs.

Despite the harsh environment, miners remain essential to network security. A high hashrate ensures resistance to attacks and maintains strong decentralization. Yet ironically, the more secure Bitcoin becomes, the more expensive it is to participate in securing it. This tension is now shaping debates about industry sustainability and investment timelines.

Some analysts argue that current conditions represent a temporary imbalance caused by rapid hashrate growth that outpaced market prices. They expect profitability to stabilize once crypto market prices find a stronger footing or once weaker miners exit the network, reducing competition. Others warn that this cycle could force a long-term restructuring of the mining industry, where only the most efficient operators survive.

Miner Stress Could Influence Market Dynamics

Historically, miner stress has occasionally triggered supply-side pressures on Bitcoin markets. When profitability collapses, some miners are forced to sell more of their reserves to finance operations, which can increase selling pressure. However, current data does not yet indicate a dramatic spike in miner selling, suggesting most are still attempting to endure the downturn rather than liquidating aggressively.

At the same time, retail investors watching the market from the sidelines may interpret mining squeeze reports as signs of potential opportunity, especially those deciding when to buy crypto during periods of price weakness. Yet the mining sector’s health remains one of the most important indicators of Bitcoin’s long-term stability, making this trend particularly important to monitor.

Can the Mining Industry Recover?

Recovery will depend on a combination of factors:
• a rebound in Bitcoin’s market value
• a slowdown in new hashrate entering the network
• lower operational costs from improving energy infrastructure
• more efficient hardware helping to ease capital strain

If the market recovers and Bitcoin moves out of its current consolidation range, miner margins could improve quickly. On the other hand, if hashrate continues climbing without a corresponding increase in profitability, the industry may face further consolidation, with smaller or inefficient miners gradually pushed out.

Outlook: A Stress Test That Will Shape the Next Mining Cycle

The latest data paints a clear picture: Bitcoin mining is navigating one of its tightest economic periods since the last major halving. Record network competition, rising operational expenses, and falling revenue have created a challenging environment across the sector.

Recent industry data shows that miner revenue per unit of computing power has fallen below $35 per PH/s, marking one of the lowest hashprice levels of the current cycle, while the network’s hashrate continues to hover near its 1.16 ZH/s all-time high. These figures underline just how severely margins have compressed in recent months.

Yet this pressure also represents a real-world stress test, one that will reveal which mining firms are built for long-term resilience and which may need to reinvent their business models entirely. Companies with access to ultra-low-cost energy, next-generation hardware, and diversified compute services may withstand the squeeze, while less efficient operators could be forced out of the market.

As the broader digital-asset ecosystem matures, mining economics will remain a crucial piece of the puzzle. For now, miners are tightening operations, investors are watching carefully, and the next shift in profitability, whether driven by improved market conditions or a natural reduction in hashrate, may determine how the sector restructures heading into the next cycle.