Increasing competition forces Bitcoin miners to look for new business models

The Bitcoin mining industry, according to Fred Thiel, CEO of MARA Holdings, is going through a difficult period due to growing competition, energy requirements, and declining profits. Thiel emphasizes that the financial game in mining is becoming a dead-end: as the number of participants grows, margins are shrinking. He believes that companies able to control energy or use new business models such as artificial intelligence will be able to survive.

Source Coindesk

The tightening of market conditions will continue until the next Bitcoin halving in 2028, when the block reward will be reduced to 1.5 BTC. If the price of Bitcoin does not rise or transaction fees do not increase, the mining economy will become untenable for many. Small miners may be squeezed out of the market due to the adaptation of large players who invest in private infrastructures and control energy resources.

Thiel notes that by 2028, the market situation may self-regulate, as many miners will face economic constraints. He predicts that to mine Bitcoin, miners will either have to control energy sources or partner with such companies as traditional mining models become less viable.