Challenges Ahead for Bitcoin Miners Post-2028 Halving
Bitcoin miners that continue to rely on conventional grid-attached power sources are poised to face significant challenges following the next halving event expected in 2028, according to a recent shareholder letter from MARA Holdings (MARA). The letter ominously states, “For those miners still relying on grid-attached power, the writing is on the wall. Energy costs will only rise. The 2028 halving will likely force another industry-wide reckoning. Many may not survive.”
This warning comes at a time when the mining sector is already grappling with profitability issues after the latest halving, which halved Bitcoin rewards and compelled numerous miners to explore alternative revenue streams, including high-performance computing (HPC) and artificial intelligence (AI).
MARA, recognized as one of the largest players in the Bitcoin mining space, emphasized that in the fiercely competitive landscape, miners must find ways to differentiate themselves or risk falling behind and facing financial difficulties. “Those that fail to differentiate will be relegated to being price takers in an increasingly competitive market,” the letter noted.
To tackle these impending challenges, MARA has outlined its strategy, stating that it has already established an “early lead” in securing low-cost energy, vertically integrating operations, and expanding beyond traditional Bitcoin mining. This strategy acknowledges the necessity for miners to address other computing demands, particularly in AI and HPC sectors.
The company elaborated, “Our ability to acquire sites and generate low-cost energy, activate depreciated hardware and energy assets, and run a vertically integrated model—from software and hardware to energy generation—will provide us greater control over costs.” Recently, MARA made a strategic acquisition of a Texas wind farm aimed at reducing its energy expenses.
Moreover, MARA has ramped up its efforts in developing and selling data center infrastructure, which it believes will serve as the foundational layer for various computing needs. “Whether for Bitcoin mining or AI inference, we believe our technologies will activate others to build while MARA provides the picks and shovels to deploy new systems and services, such as energy management, load balancing, and infrastructure,” the company stated.
In addition to these strategic moves, MARA reported impressive fourth-quarter earnings, with sales reaching $214.4 million, surpassing the average analyst estimate of $187.8 million according to FactSet data. Following this announcement, MARA’s stock rose by more than 8% in post-market trading, even as Bitcoin experienced a decline of 4.2% on Wednesday.
