Why Miners Are Facing Tough Conditions

Miners are grappling with one of the most challenging profit margins the industry has seen in years.

Recently, a detailed analysis revealed that hash revenue for major public miners decreased from approximately $55 per petahash (PH) per day in Q3 to around $35 per PH per day today. The median all-in cost for these operations is close to $44 per PH per day, indicating that many miners are currently operating at a loss.

Additionally, the network hashrate remains high at about 1.0-1.1 zettahash (ZH) per second, intensifying competition for block rewards. The key issue is the return on investment (ROI): even new mining machines are expected to have payback periods exceeding 1,000 days, whereas the next halving is about 850 days away. Without improvements in market conditions, miners acquiring hardware today may have trouble recouping their investments before the next halving.

Mining Rig

This guide explores the economics of mining in 2025, how to determine if your mining machines are not profitable, and what options you have if they are.

Understanding Mining Economics in 2025

After the halving, miners are competing for a diminished pool of rewards.

The block subsidy was halved from 6.25 Bitcoin to 3.125 BTC during the 2024 halving, which drastically reduced a key source of miner revenue.
With around 144 blocks produced daily, this results in approximately 450 BTC issued daily, alongside transaction fees.
Concurrently, the network hashrate has surged into the zettahash range, averaging over 1.0 ZH/s in recent weeks.

This combination has led to an unprecedented drop in the hash price, which represents the USD revenue per PH per day of hashing power. Reports indicate that current hash prices are around $35-$38 per PH per day, or about $0.03-$0.04 per terahash (TH) per day.

Miners must manage two main expenses:

Capital Expenditure (CapEx): Costs associated with application-specific integrated circuits (ASICs), transformers, racks, networking, and land.
Operating Expenditure (OpEx): Ongoing expenses for electricity, hosting fees, cooling, maintenance, debt payments, and staffing.

To remain viable, miners need to meet two criteria:

Cash Flow Test: Is daily revenue higher than daily operating expenses at current hash prices and energy costs?
Payback Test: Can the mining rig reasonably recover its purchase price before the next halving or significant hardware obsolescence?

These benchmarks are crucial for assessing profitability.

Did you know? In mining, a kilowatt-hour (kWh) is the charge reflected on your electricity bill. If a miner operates at four kW, they consume four kWh each hour, making this a vital figure for calculating daily and monthly costs.

Challenges for New Generation Rigs

If you’re utilizing modern hardware, the situation may be unsettling.

The latest machines, such as Bitmain’s Antminer S21 and the Whatsminer M60 series, operate efficiently at around 17-22 joules per terahash (J/TH). This significant upgrade from older models sets a new standard for large-scale operations.

While this efficiency should ideally provide healthy profit margins, real-world conditions tell a different story:

At hash prices of $35-$38 per PH per day, even the most efficient rigs struggle to cover electricity expenses for miners on average industrial tariffs.
Analysts consider about $40 per PH per day as a typical break-even point; falling below this threshold results in increased losses.
These conditions have led to ASIC payback periods exceeding 1,000 days, surpassing the time remaining until the next halving.

Some profitability guides suggest that, under these circumstances, purchasing BTC directly might be simpler than mining, although individual situations vary considerably. This predicament is why many rigs are going offline; in numerous setups, more uptime translates to more losses.

Did you know? A miner’s joules per terahash (J/TH) rating indicates how much energy is consumed to perform hashing. A lower J/TH denotes greater efficiency, making this a crucial metric for evaluating ASIC performance.

Determining If Your Machines Are Unprofitable

You can evaluate your mining setup in just 15 minutes using this simple framework.

Step 1: Gather Your Information

ASIC model and hashrate
Efficiency (J/TH) as specified by the manufacturer
Total power cost per kWh (including energy, demand fees, and hosting charges)
Pool and additional site-level fees

Step 2: Estimate Daily Revenue

Multiply your total hashrate in PH or TH by the current hash price, which ranges from $35-$38 per PH/day.
For TH units, note that $35 per PH/day is equivalent to $0.035 per TH/day.

Step 3: Calculate Daily Power Costs

Convert efficiency to power draw using the formula: (J/TH x hashrate in TH) ÷ 1,000 = kW
Multiply kW by 24 and the kWh price.
Include a buffer of 5%-10% for cooling and transmission losses.

Step 4: Conduct the Cash Flow Test

If daily revenue is less than daily power costs, you are incurring a loss for every day your rig operates.
Assess what happens to your setup if hash prices decrease by 10% and mining difficulty increases by 10%.
If the results push you into red figures, your operations may depend on an unlikely surge in BTC prices.

Step 5: Run the Payback Test

Divide the ASIC purchase price by your net daily profit (revenue minus operational costs).
If payback time exceeds approximately 2.3 years—the time frame until the next halving—consider any new hardware purchases as speculative rather than sound investments.

If both metrics indicate trouble, your mining setup may resemble a costly method of dollar-cost averaging rather than a sustainable business.

Options When Mining Becomes Unprofitable

If the financial outlook is grim, consider these adjustments.

You might reduce power levels, shut down suboptimal machines, or only operate during off-peak hours. In some markets, energy providers offer incentives to large operations that reduce energy usage during peak demand periods.

For those using hosted mining solutions, this may involve renegotiating contracts or moving to facilities with more favorable power rates. Increasingly, miners are tapping into renewable energy sources like flared gas, which can dramatically lower operational costs.

Some operators are also exploring artificial intelligence and high-performance computing projects, leasing extra capacity for tasks like inference or rendering. While this shifts operational needs—requiring adjustments in cooling and networking—it can transform a non-productive site into a profitable data center.

For some miners, selling rigs or consolidating operations might be more feasible than weathering another downturn.

Implications of Shutdowns for Future Miners and Bitcoin

The struggles of miners don’t necessarily pose a risk to the Bitcoin protocol.

Historically, when operators reduce their activity, network difficulty decreases, improving profitability for those that remain. Currently, the situation is more complex, as large public miners, equipped with advantageous power contracts and hedging, can survive longer, delaying necessary adjustments.

For those interested in mining in 2025, the requirements are clear:

Access to truly low-cost power, ideally around $0.06 per kWh or lower.
Utilize next-gen hardware with efficiency rated under 20 J/TH.
Maintain discipline through regular break-even evaluations and a readiness to power down when operations become unviable.

For Bitcoin itself, fluctuations stemming from miner shutdowns appear more like a clean-up process, allowing capital and energy to shift from inefficient operators to more efficient ones.

The critical takeaway for smaller miners is that, often, acquiring BTC directly may be more beneficial than continuing to mine, though this is subject to variations in electricity prices and hardware efficiency.