MARA CEO Predicts Tough Times Ahead for Miners

Bitcoin mining faces challenges with rising competition and shrinking profitability, says MARA CEO.

The bitcoin mining industry is facing a challenging period due to increasing competition and declining profitability, according to MARA CEO Fred Thiel in an interview with CoinDesk.

He stated that mining is a zero-sum game. When new participants add capacity, it becomes harder for others.

“Margins are shrinking, and the lower profitability threshold is determined by the cost of electricity,” noted Thiel.

He believes the industry is becoming “more mature and tougher.” Only miners with access to cheap energy or new business models will survive.

Many companies are moving into adjacent areas: developing artificial intelligence or creating infrastructure for high-performance computing. Others are being pushed out by players using their own setups at lower costs.

“Equipment manufacturers are launching their own farms because customers are buying fewer devices. The global hashrate continues to grow, meaning the profitability of other participants is falling,” added the head of MARA.

Pressure on the Industry

Thiel warned that the situation for miners will become even more difficult after the halving in 2028, when the block reward will decrease to 1.5625 BTC. The economics of mining will become unviable for many unless transaction fees or the price of bitcoin increase.

According to the creators’ design, fees were supposed to replace block rewards over time, but this has not happened, emphasized the MARA CEO. In such conditions, small miners face significant pressure. Thiel stated that “MARA’s strategy is to be in the lower quartile of production costs.”

“In a compressed market, 75% of competitors should shut down before us,” explained Thiel.

He expects the market to self-regulate when miners reach the profitability limit. By 2028, participants will need to either generate their own energy, become part of energy companies, or partner with them.

“The days of miners simply connected to the power grid are numbered,” concluded Thiel.

In November, Riot Vice President Josh Kane described bitcoin mining as “not a goal, but a means” for the company.