Bitcoin Mining Profitability Plunged to Record Lows in Late 2025

Bitcoin mining faced a difficult period in late 2025 as profitability dropped to record lows. Margins dropped sharply, forcing miners to rethink their operations and look for new ways to earn.

In November, mining centers drew global attention as costs reached very high levels. Bitcoin traded around $82,000 at that time, while mining expenses rose to $44.8 per petahash per second. Payback periods for machines exceeded 1,200 days, showing the industry needs to adapt.

How Historic Low Margins Affect Mining Economics?

In October, the mining network’s hash rate reached 1.1 ZH/s, raising competition worldwide. Miners operating high-efficiency rigs are seeing reduced margins, while older machines are increasingly unprofitable. Payback periods now exceed three years, leading industry leaders to issue warnings. MARA CEO Fred Thiel said that after the 2028 halving, standard mining methods may only work with low-cost energy or diverse strategies.

Rising financing costs are adding pressure. Companies relying on regular Bitcoin revenue are seeing profits shrink, and miners moving into AI infrastructure face large upfront expenses. The industry is experiencing both financial strain and a shift in revenue sources.

Some miners are still expanding despite losses. They continue buying advanced ASIC rigs and GPU clusters, but with more cautious financial plans. This shows the balance between growth goals and survival.

Winter energy prices in North America have increased costs further. Miners using natural gas or hydropower feel the most pressure, while those with cheaper or renewable energy keep a slight edge.

Miners Shift Focus to AI Operations

The mining industry is also changing. Seven of the top ten mining companies now earn much of their revenue from AI infrastructure. Bitfarms is moving away from Bitcoin mining to focus on high-performance computing centers. CEO Ben Gagnon expects AI hosting profits to be higher than previous mining income, showing how fast earnings are shifting.

Large-scale GPU use is key to this change. IREN’s $9.7 billion deal with Microsoft for cloud services, including NVIDIA GB300 GPUs, shows how miners are entering enterprise AI markets. Hut 8’s sale of Canadian power plants and CleanSpark’s focus on dual-purpose computing highlight a growing trend: miners are combining AI and cryptocurrency operations to make assets work harder.

These changes also affect how success is measured. Hash rate and BTC output are now joined by AI uptime, server use, and cloud service contracts. Companies are increasingly judged by overall efficiency rather than just mining output.

Financial Pressures and Regulatory Challenges

Financing in the mining sector is changing in response to declining profits. Companies are increasingly using convertible notes, zero-interest deals, and big strategic investments to grow. CleanSpark, TeraWulf, Cipher Mining, and IREN have together raised billions to expand computing power, energy, and operations.

Regulations add more challenges. Malaysia found about 14,000 illegal operations, while Russia uses AI to monitor electricity theft. Japan and Belarus are supporting mining, including it in their national energy and economic plans. This mix of rules makes global operations risky for miners.

Because of these pressures, miners are turning to consolidation, vertical integration, or AI projects. Success now depends on being flexible, planning carefully, and managing changes in Bitcoin prices and costs.

What Miners Are Doing with Their Bitcoin Holdings?

Even with low margins, top miners are holding onto Bitcoin instead of selling. MARA, CleanSpark, Cango, and Bitdeer keep large reserves, showing confidence in the long-term value of the asset. These holdings can help protect against market swings and position companies to gain when profits recover.

Monthly production continues, but miners are careful. Their accumulation shows they see the downturn as temporary, not permanent. Companies that manage their funds well now could come out stronger in the next cycle.