Currently, Bitcoin miners are facing unprecedented survival challenges:
Transaction fees have plummeted.
Operating costs have skyrocketed.
Profit margins are severely compressed.
Small miners are finding it increasingly difficult to sustain operations and are exiting the market, leading to a decline in hash rate and threats to network security. Against this backdrop, the survival strategies of Bitcoin miners and the future development of the Bitcoin ecosystem have become focal points in the industry.
1. Declining Transaction Fees
Recently, the average transaction fees on the Bitcoin network have hit multi-year lows. On February 15, 2025, CryptoQuant analyst Maartunn pointed out that the average transaction fee had dropped to 0.000013 BTC (approximately $1.27), a multi-year low. This is primarily due to the waning popularity of Bitcoin inscriptions, which has led to a significant decrease in the number of unconfirmed transactions and an idle mempool.
2. Rising Operating Costs
With increasing energy prices and mining difficulty, miners' operating costs continue to soar. According to CoinShares research, in Q3 2024, the average cost for U.S.-listed miners to produce one Bitcoin rose to $55,950, a 13% increase from the previous quarter. When depreciation and stock-based compensation are factored in, the total cost of producing one Bitcoin reaches $106,000.
3. Intensified Market Competition
Large miners, with their capital and technological advantages, continue to expand their hash rates, making it difficult for small miners to stay afloat and further increasing market concentration. On February 11, 2025, the mining difficulty of the Bitcoin network rose by 5.6%, reaching a record high of 114.7 trillion, further intensifying competition among miners.
1. Small Miners Exit
Decreasing revenue and rising costs are forcing small miners to shut down and exit the market, accelerating industry consolidation. Only large miners with substantial capital and advanced technology can maintain competitiveness. Reports indicate that U.S. Bitcoin miners are accumulating significant Bitcoin reserves to cope with declining profit margins due to increasingly fierce resource competition.
2. Diversified Operations
Some miners are seeking diversified revenue streams, such as renting out hash power to the artificial intelligence (AI) and high-performance computing (HPC) sectors, to compensate for the shortfall in Bitcoin mining income. For example, companies like Core Scientific have begun leasing data center capacity to AI hyperscalers.
3. Green Energy Adoption
To reduce energy costs and address environmental pressures, miners are actively adopting renewable energy sources such as hydropower, wind power, and solar energy to improve operational efficiency and sustainability. It is estimated that approximately 50% to 60% of the electricity used in Bitcoin mining comes from sustainable energy sources (including nuclear power).
1. Technology-Driven Innovation
The Bitcoin network needs to introduce more application scenarios and technological innovations, such as smart contracts and decentralized applications (DApps), to increase network activity and transaction volume, thereby boosting miner revenue.
2. Policy Environment Impact
Regulatory policies on cryptocurrencies in various countries will directly affect miners' operating environments and costs. Clear and supportive policies can help the industry develop healthily. For example, several U.S. states are advancing Bitcoin reserve-related legislation, which may provide a more friendly policy environment for miners.
3. Changing Market Demand
Changes in the demand for Bitcoin as a store of value and payment medium will directly affect its price and miners' profitability. Market confidence and acceptance of Bitcoin are key factors determining its future development.
Bitcoin miners are at a critical juncture of survival. Faced with the triple challenges of declining transaction fees, rising costs, and intensified market competition, miners need to actively seek diversified operations, technological innovation, and green energy adoption. At the same time, the Bitcoin ecosystem also needs to continue to evolve to adapt to changes in market demand and the policy environment, ensuring its position and role in the future digital economy.
