The Survival Battle of Mining Companies: Must Master the Lifeline of Energy Before 2028

Ser_APY_2000 · 2025-11-24T08:27:16+00:00

MARA Holdings CEO Fred Thiel pointed out that the Bitcoin mining industry is facing intense competition and soaring electricity costs, leading to the elimination of small mining companies. It is expected that by 2028, the Halving will cause the mining economics to collapse, leaving small mining companies with the only option of becoming power producers or cooperating, resulting in a polarization of the industry.

Ser_APY_2000

2025-11-24 08:27:16

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MARA Holdings CEO Fred Thiel's recent remarks hit a nerve in the Bitcoin mining industry. Simply put, the mining business is becoming increasingly competitive.

How difficult is the current situation?

Increased competition, soaring electricity costs, and squeezed profits - these are three mountains facing every mining company. As the hash rate continues to rise, the difficulty of mining also increases, causing electricity costs to skyrocket. This creates a vicious cycle: Mining is essentially a zero-sum game; your gains come at the expense of others being eliminated.

The result is that small mining companies without access to cheap and stable power supplies are beginning to turn to AI or high-performance computing, while some are being directly eliminated from the industry. The situation of big fish eating small fish is becoming increasingly obvious.

The Lifeline of 2028

What’s even more heartbreaking is that the next Bitcoin halving (in 2028) will make the situation even more terrifying. By then, the block reward will drop to around 1.5 BTC. If transaction fees do not increase significantly, or if the coin price does not skyrocket, the economics of Mining could completely collapse.

The original design of Bitcoin was to have transaction fees eventually replace block subsidies, but the reality is that transaction fees have remained low, and even occasional spikes are just a drop in the bucket. This puts immense pressure on small mining companies.

There is only one way to survive

Tir's prediction is straightforward: by 2028, mining companies will either become power producers themselves, be acquired by power companies, or have to collaborate with them.

Large mining enterprises are already taking action—hedging risks by controlling energy sources and investing in AI infrastructure. Smaller players are facing very limited choices.

In other words, the future of the mining industry will show polarization: top players who control energy will thrive, while others? Most likely out.

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