Bitcoin miners face sustained challenges due to rising network difficulty and fluctuations in revenue. This is exacerbated by high upfront hardware costs and power costs. These factors narrow down profit margins and increase operational efficiency, which is essential to the viability of miners.
Representatives from Everminer, Bitdeer and Cleanspark told Beincrypto that Miner is tackling challenges with a variety of solutions, from optimizing financial management and core operations to building new relationships with the energy grid to expanding into new computing markets.
Profitability limit
As network difficulties reach new record highs, Bitcoin miners face challenging environments.
The difficulties rose this month to over 136 trillion, marking the fifth consecutive increase since June. The surge caused by more computing power participating in the network occurs as miners’ revenues weaken. Hashpris (revenue benchmark) is $51, the lowest level since June.
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This combination of record difficulty and reduced revenues puts pressure on profitability.
Historically low price performance in September worsens the situation and directly reduces the rewards of miners. This volatile shift contrasts sharply with the more profitable trend seen just a month ago in August when miners margins were strengthened, as Bitcoin prices outweighed the rising difficulty.
For veteran Bitcoin miners, the current instability in the sector is attributed to diverse market pressures.
Increased costs to stay competitive
As Bitcoin mining becomes more competitive, what sets miners apart is their unique strategies to respond to threats and their approach to expanding operations.
“We are always competing with the latest network difficulty and regular halving in early 2024. We must always address regular Bitcoin volatility, periodic energy markets and improvements in mining hardware technology.
For miners who have mined for long enough, they know that aspects like volatility are inherent to the Bitcoin cycle. However, as Bitcoin usage increases and network difficulty becomes more complicated, we need to learn how to handle rising costs.
“Machine costs account for nearly 80% of facilities (capital expenditures), while electricity accounts for around 80% (operational expenditures),” explained Ross Gan, Chief Communications Officer at Bitdeer, and “The biggest long-term threat is efficient compression.
Over the years, they have each developed carefully coordinated operational strategies that are particularly important to withstand volatile market conditions.
Operations Solutions: From Debt to Discipline
During his discussion of the financial discipline of his company, Suddock spoke about the application of Clean Spark, a concept he described as “capital stewardship.” This strategy focuses on responsible and disciplined management of the company’s assets to generate long-term value.
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Instead of relying on external investors and debt-heavy balance sheets, the company pays its business on its own.
“Given our clean balance sheet and a conservative approach to debt, we have a prosperous business with significant capacity for growth,” he said.
To further amplify revenue, CleanSpark strategically accumulates Bitcoin during profitable periods and actively manages the Bitcoin Treasury.
“We don’t just sit in Bitcoin Holdings. We created a digital asset management team to manage that balance and monetize efficiently,” Sudock added.
In the meantime, to combat cost pressure, companies like Bitdeer have resorted to vertical integration, including direct control of supply chains, from production to distribution.
“We guarantee the construction and deployment of our own ASICs, the generation of the power needed to mine, the reduction in CAPEX, supply security, and greater options,” he said.
By leveraging the supply chain, Bitcoin mining companies can reduce their dependence on third parties.
These problems can be treated through operational efficiency and proper planning, but other external forces are generated that are not necessarily controlled by miners.
The power of geographical diversification
Over the years, Bitcoin mining companies have learned the value of spreading operations across the map. Policies and regulations can vary dramatically between countries, and even between states or states in a single country.
“The real risk today is a flip-flop of policy and regulation. A country can change rules overnight to freeze hardware. It’s a nightmare. As we saw in China in 2021, in Russia in 2024, in Ethiopia, more recently in Ethiopia, in Ethiopia, Everminar and Cybertian Mattrenitysky explained.
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This early experience taught Matrenitski a valuable lesson. It’s about spreading risks throughout the region.
“We run our sites across several jurisdictions and climates. A simple logic: the US is politically stable, but with higher reductions and costs. Ethiopia is cheaper with high margins, but with higher policy risks.
In addition to using locations to spread political risk, miners are also leveraging their geographical presence to become valuable partners in the energy grid.
From energy consumers to grid partners
Bitcoin miners have long been considered a massive 24-hour energy consumer. However, industry leaders are redefine their narrative, particularly by positioning themselves as a useful ally in the power grid, as systems integrate more renewable energy sources.
“Unlike many beliefs, Bitcoin mining is perfectly matched with eco-friendly values, and in fact there are many benefits to the world’s eco-friendly future and better energy systems. Mining naturally has the cheapest electrons going anywhere. In most cases, it’s especially hydro. Green,” Matrenitsky told beincrypto.
This natural alignment between renewable energy and its low cost allows miners to play a more active role in stabilizing the grid. Based on this symbiotic relationship, miners are considered useful ally of the power grid.
“Reports from some regions show that reductions from miners help maintain grid reliability. ERECOT and PJM (like power grid operators) can formalize structures that allow miners to monetize demand responses and place them as stabilizers rather than stressors.
If everything else can’t protect against bad market conditions, some miners have opted to diversify into new markets.
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Great discussion: mining and high-performance computing
Some Bitcoin miners focus on optimizing their current operations and financial models, but the number is increasing. We are investigating new frontiers. Diversification into high-performance computing (HPC) and artificial intelligence (AI) services.
Miners like Bitdeer and Cleanspark can find natural extensions to existing pivots.
“Mining and AI/HPC workloads require different types of data center infrastructure, but they can leverage the same foundations of power, cooling and grid interconnection,” Gunn explained.
Sudok agreed and added:
“Up-time is important for HPC and is less price-sensitive than Bitcoin mining. The balance between these dynamics will guide you appropriately to specific segments of the grid and each use case.”
This potential pivot has become an important strategic opportunity and a key point for strong discussion within the industry.
Matrenitski argued that while both companies consume a lot of energy, their core business models are fundamentally different.
“HPC and mining are two very different worlds. Different hardware, different CAPEX/OPEX structures, different network demands, completely different unit economics. Mining depends on ASIC – HPC runs on GPUs.
Owning just computer equipment is not enough to make a profit.
“If you have true data center DNA (networking, cooling, enterprise support), you can sign a solid hosting agreement and make it work. But there’s no longer a simple money story. Many people will underestimate how difficult the business is,” Matrenitsky added.
Fortunately for miners, there are many ways to deal with difficult market conditions. The best solutions depend on the business model and leadership of each company.
