Bitcoin miners are grappling with unprecedented challenges as power costs reshape the landscape, according to discussions at the recent SALT conference in Jackson Hole, Wyoming. Industry leaders highlighted the need for diversification, driven by surging electricity demands and the evolving role of cryptocurrencies in the financial ecosystem.
A Shifting Paradigm
Mining companies, once tethered to the cyclical nature of bitcoin halvings, now face a different reality. Matt Schultz, CEO of Cleanspark, underscored this transition: “We used to come here and talk about hash rate. Now we’re talking about how to monetize megawatts.” As exchange-traded funds and strategic treasury adoptions increase the demand for bitcoin, the traditional four-year cycle seems less relevant. This shift is further complicated by the fact that Bitcoin Hashrate, Mining Difficulty Soar While Fees Sink, adding another layer of complexity to the miners’ operations.
Cleanspark, with its vast energy infrastructure, is seizing new opportunities by looking beyond mere mining. “Our speed to market with the electricity has created opportunities such that now we can look at ways to monetize power beyond just bitcoin mining,” Schultz noted. The firm’s expansion into diverse energy solutions exemplifies a broader trend among miners to adapt and thrive.
The Cost Conundrum
Patrick Fleury, CFO of Terawulf, didn’t mince words about the financial pinch miners are feeling. “Bitcoin mining is an incredibly difficult business,” he stated, pointing out the staggering costs tied to electricity. With bitcoin prices hovering around $115,000, power expenses alone consume half of the revenue, leaving slim margins after accounting for operational costs. This is compounded by the fact that Bitcoin Miners Drain Reserves, Adding Headwinds to BTC Price Outlook, which could further strain financial resources.
The relentless expansion of mining networks exacerbates the issue. Companies like Bitmain, with their continuous production of mining rigs, flood the market, increasing competition and difficulty. Yet, Terawulf is pivoting with a bold strategy, having recently inked a $6.7 billion deal with Google to convert mining infrastructure into data centers. “These things… don’t move quickly,” Fleury explained, noting the lengthy due diligence involved in such transformative ventures.
Power: The True Currency
For Kent Draper, chief commercial officer at IREN, the focus remains on being a low-cost producer. “Having control of our sites, having operational control, being in areas that are low-cost power jurisdictions—that’s how we’ve always focused our business,” Draper said. Even with impressive margins in bitcoin mining, IREN is cautiously eyeing opportunities in AI and cloud computing.
The convergence of bitcoin mining and AI technology is becoming more apparent. Draper highlighted IREN’s interest in both co-location and cloud, with different capital intensities and faster payback periods on the horizon. Meanwhile, Marathon Digital (MARA) CFO Salman Khan emphasized agility as key to survival, drawing parallels to the oil industry’s cyclical nature.
Future Directions
Despite the pivot towards AI and data centers, bitcoin remains a vital component of these companies’ strategies. The panelists at Jackson Hole acknowledged that while new technologies present lucrative opportunities, the digital currency still holds significant potential.
Fleury pointed out the substantial cash flow potential from Terawulf’s contracted power capacity, while Khan highlighted a disconnect between Marathon’s bitcoin holdings and its market valuation. Draper reinforced IREN’s efficiency and low-cost operations, which he believes will continue to attract investor attention.
As the industry navigates this complex terrain, the role of bitcoin might evolve beyond its current form. Schultz suggested that bitcoin could become integral to energy systems, helping balance power networks rather than merely serving as a speculative asset. The question remains: will miners successfully navigate this new era, or will they be left behind as the market transforms?
The answers may not be clear yet, but one thing is certain—power is now the currency that matters most.
Source
This article is based on: Bitcoin Mining Faces ‘Incredibly Difficult’ Market as Power Becomes the Real Currency
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
