Following the Bitcoin halving in April 2024, the mining industry entered one of the most challenging periods in its history. In 2025, miners experienced record-low profitability despite the rising price of BTC.
The halving of the block reward and the increase in operating costs meant that a significant proportion of mining operations became unprofitable. Weaker players were forced to capitulate — they left the network and sold their assets — while more resilient companies optimized their business models, focusing on efficiency and alternative revenues, such as AI computing. There was also a mass migration of miners to regions with cheaper energy, changing the industry’s geography.
By early 2026, the market had entered a phase of adaptation. The hash rate stabilized following declines, and surviving companies relied on renewable energy sources and diversified their revenue streams. Now, let’s examine how halving is changing the structure of the mining industry and affecting profitability, the price of BTC, and the sector’s long-term prospects.
What happens to the industry after halving
After the block reward was halved from 6.25 to 3.125 BTC, daily Bitcoin production fell to ~450 coins. This instantly impacted the industry’s profitability. At the same time, mining companies’ total expenses increased by 40-60% in 2025 due to inflation in equipment costs, data center maintenance costs, and rising electricity prices. Mining energy costs became a determining factor for survival after the halving. Farms with rates above 0.05 USD/kWh, in most cases, moved into the red. However, projects with subsidized or renewable energy managed to stay afloat.
Additionally, mining difficulty increased after the halving. From 2024 to 2025, it continued to grow due to an increase in aggregate computing power (hash rate) and competition for a reduced reward. This reinforced the bias in favor of large, technologically equipped players and accelerated the closure of mining farms in 2026. The farms’ inability to maintain operational profitability was the main reason for their closure.
By the end of 2025, the situation had stabilized somewhat. A roughly 9% decrease in network difficulty resulted from the exit of unprofitable miners, marking the beginning of an adaptation phase. Nevertheless, the industry remains sensitive to energy prices and the cost of BTC, making this a transformative period in mining history.
Mining profitability after the event
After the halving, the industry experienced a sharp drop in revenue. Miners’ revenue fell by 50% in BTC terms. In dollar terms, the situation was ambiguous — the rise in the price of BTC temporarily softened the blow. However, in the second half of 2025, the situation deteriorated significantly.
The key indicator was hashprice, or revenue per unit of computing power. In 2025, it fell below $35 per PH/s, and the average daily profit per TH/s dropped to its lowest level since 2023. Under these conditions, many operators were forced to operate at break-even or at a loss. An additional pressure was the approximately 80% drop in transaction fees, which deprived miners of an important source of compensation after the halving. This decline in transaction fees was due to a decrease in on-chain activity following the hype surrounding the Runes, Ordinals, and BRC-20 protocols.
The situation began to stabilize somewhat by early 2026 due to a correction in complexity and the exit of weak players. However, mining profitability forecasts remain subdued. Without sustained growth in the price of BTC or a further reduction in costs, margins will remain minimal, cementing a structural shift towards professional, capital-intensive mining.
Capitulation of miners
Against the backdrop of prolonged pressure on margins, a full-fledged wave of capitulation has unfolded in the industry. This term refers to the mass exit of unprofitable participants from the network, accompanied by the shutdown and sale of equipment and BTC assets and reserves. In 2025, analyzing BTC miner capitulation became one of the key tools for assessing the state of the sector and market risks.
Capitulation can be recognized by several indicators. First, unprofitable capacities are shut down. Additionally, there is an increase in on-chain outflows as miners sell BTC, thereby increasing the supply in the spot market. During peak periods, sales by miners accounted for up to 30% of all market outflows, putting pressure on the price of BTC. Despite a favorable macroeconomic environment, Bitcoin experienced a sharp decline in prices under these conditions in the fall of 2025. However, from a cycle perspective, capitulation usually acts as a cleansing mechanism. After weak players exit, supply shrinks, and the market receives a signal that a local bottom is forming. Historically, such phases have preceded a price recovery in most cases.
Hash Rate and Its Dynamics
During crisis phases in mining, the dynamics of computing power clearly reflect the state of the industry. When miners abandon the industry, the hash rate naturally decreases as operators shut down unprofitable equipment, reducing the overall load on the network. After reaching peak values in 2025, the hash rate decreased by approximately 9%.
Changes in the hash rate affect network security. In the short term, a 10-20% decrease in computing power could theoretically weaken resistance to attacks. However, Bitcoin compensates for this by adjusting the difficulty. An increase in mining difficulty after halving enables the network to self-regulate and prevent systеm failures. After the 2020 halving, the hash rate decreased by more than 20% temporarily, and by almost 40% in 2018, which caused concern but did not lead to actual attacks or network disruption. A similar scenario played out in 2025. Despite the shutdown of a significant portion of mining capacity, the price of Bitcoin (BTC) remained stable, and the market received another signal that the capitulation phase was over.
Miner migration
One direct consequence of the crisis was the mass migration of miners after halving due to a sharp increase in costs and uneven access to cheap energy. Large public companies and institutional operators, such as Hut8 and Bitdeer, began purposefully moving their operations to regions with stable energy infrastructure and predictable tariffs. The most attractive destinations were the United States (primarily Texas), Canada, Iceland, and Latin American countries. In 2026, these are the most favorable areas for miners who are forced to relocate their equipment because access to hydroelectric and geothermal generation allows them to keep their costs below $0.03/kWh.
The energy market has effectively become the industry’s main regulator. A new balance of power is emerging due to cheap energy and new mining regions. The share of countries with subsidies and renewable sources is growing, and the concentration of capacity is increasing in jurisdictions with favorable regulations. This process is accelerating the consolidation of the sector and cementing the transition from distributed mining to a more centralized, professional model.
Mining companies’ survival strategies
It is worth noting that professional participants’ viability in the sector today depends primarily on top management’s ability to manage costs effectively.
- Continuous equipment optimization has become an essential part of miners’ survival strategies during the crisis. Most operators are selling decommissioned, obsolete ASICs on the secondary market while investing in more energy-efficient solutions.
- The second critical area is the conclusion of long-term electricity contracts. Fixed tariffs and partnerships with energy companies ensure cost predictability and protect businesses from price spikes.
- Special attention is being paid to transitioning to renewable energy sources. Using hydro, wind, and geothermal generation reduces operating costs and increases resilience to regulatory pressure. Large mining companies can invest in their own infrastructure and vertical integration, including energy storage and autonomous power plants.
- Finally, business diversification is playing an increasingly important role. Many operators are reallocating some of their resources to the AI and high-performance computing sectors to create additional revenue streams. Miners gain a strategic advantage from data centers’ ready-made infrastructure, and AI contracts provide stable revenue independent of BTC volatility and halving effects. Against this backdrop, the rapid depreciation of ASIC equipment accelerates the reallocation of capacity toward AI and HPC.
The crisis’s impact on the Bitcoin market
The mining sector crisis was one of the main causes of market volatility in 2025. The mass exit of unprofitable participants and miners’ pressure to sell BTC exacerbated downward price movements during correction periods. This mechanism clearly manifests the synchronous impact of halving on the BTC market and miners, as the industry’s structural problems are transmitted to the spot market.
However, as weak players exit the network, the volume of forced sales decreases. The market gradually clears of excess supply and the situation normalizes. External factors also contribute to the stabilization of the situation. Inflows of institutional capital, an increase in long-term investments, and a slowdown in miner sales are easing market pressure. Together, these elements form a more stable foundation for Bitcoin, even amid the ongoing mining crisis following the halving.
The future of the mining industry
In the coming years, events affecting the mining sector—such as halving events, rising energy costs, and increased competition—will determine the trajectory of the industry’s development.
- Consolidation and a shift to a professional model will become key trends. Large mining companies will significantly strengthen their position after halving by applying progressive approaches. Players with access to capital, cheap energy, and modern equipment will increase their market share.
- From an economic perspective, the mining profitability forecast for 2026–2027 remains modest. Growth in hashrate and complexity will limit margins, and business sustainability will depend directly on energy efficiency and revenue diversification.
- Technological factors are also becoming crucial. New cooling systems, including immersion solutions, and further reductions in equipment energy consumption will be the basis for competitive advantages.
FAQ — frequently asked questions
- Why are miners facing a crisis after the halving?
The main reason is the effect of halving on miners’ revenues. The block reward is reduced by 50%, while equipment and electricity costs continue to rise. This led to a decline in mining profitability in 2025, even with high BTC prices, making a significant portion of farms unprofitable.
- What is miner capitulation, and how does it affect the market?
Capitulation occurs when unprofitable participants leave the network en masse, selling their equipment and Bitcoin reserves. During these periods, miners sell Bitcoin due to losses, which puts additional pressure on its price.
- Where are miners migrating in search of cheap energy?
As energy costs have become a decisive factor, miners are moving their operations to regions with subsidized, renewable energy sources. These regions inсlude Texas, Canada, Iceland, Paraguay, and El Salvador.
- How will mining profitability change in 2026?
According to current estimates, Bitcoin mining may become profitable again in 2026 due to the stabilization of the hash rate and cost optimization. However, without a significant increase in the price of BTC or a further reduction in costs, margins will remain tight.
Conclusion
Halving triggers a profound restructuring of the mining industry, reducing profitability and provoking structural changes. During the crisis, the main survival strategy for miners is to focus on energy efficiency, equipment optimization, transitioning to renewable sources, and diversifying into AI. Consequently, the industry is becoming more professional, capital-intensive, and technologically advanced.
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