Some miners in the Bitcoin market are struggling to maintain profitability during the current market cycle and are turning to artificial intelligence, according to algorithmic trading firm Wintermute.
The difficulties in this Bitcoin cycle are playing out very differently than the market pressures of 2018 and 2022, and are paying dividends. so Market makers write that it is even more difficult for many miners.
Wintermute said that in previous eras, margin compression primarily reflected the cyclical interaction of fees, commissions and operating costs, but now the squeeze feels more structural. The report added: “We are at a structural ceiling, not a cyclical trough. Hashrate and difficulty have risen so much that the protocol’s automatic adjustment is no longer enough to ease the economic burden.”
wintermute says $BTC Miners already have the infrastructure needed to transform to AI
Wintermute said in a blog post: noticed Why diving into AI is the logical next step $BTC Because miners already have the energy and computing resources that the rapidly growing AI industry is seeking to secure. However, he cautions that even if the potential exists, the transition to AI will not be easy and will still be incredibly expensive.
2024 $BTC The halving partially contributed to the decline of Bitcoin mining and the shift to AI. In April 2024, the block reward was cut in half from 6.25. $BTC up to 3.125 $BTCThis immediately reduced miners’ income by 50%, while operating costs, mainly power, cooling, and maintenance, remained the same or increased. Currently, the Bitcoin network has generated approximately 450 Bitcoins. $BTC per day.
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At $100,000 per cryptocurrency, miners from all over the world compete for a pool of $45 million per day, excluding transaction fees. Simply put, simple mining is not as profitable as it used to be, especially for those with older rigs and high energy bills. Each halving reduces coin rewards and makes miners more dependent on transaction fees.
Wintermute said that in this market cycle, Bitcoin has failed to achieve the 2x price appreciation that miners rely on to make up for lost revenue from the halving, and gross profits have become comparable to bear market levels. Additionally, miners’ incomes continue to decline due to rising energy prices.
Nevertheless, Wintermute says he sees opportunities in derivative structures, covered calls and cash-backed puts. Traditionally, miners have focused on staking and DeFi to generate profits.
“We believe that active balance sheet management is the most underutilized tool available to miners and deserves much more strategic attention. $BTC Holding it as an operational asset rather than a passive reserve will provide a structural advantage during the next halving. ”
MARA plans to sell some of its Bitcoin holdings due to concerns about asset decline
According to filing MARA Holdings intends to work with the U.S. Securities and Exchange Commission to sell a portion of the Bitcoin on its balance sheet in 2026. MARA expects that if Bitcoin prices remain low or fall further, the company’s balance sheet and liquidity could take a hit, and therefore plans to sell.
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The company further explained that the majority of its revenue comes from Bitcoin mining, and a sustained decline in Bitcoin prices will pose challenges to its ability to manage expenses, debt, and strategic investments.
It also noted that repurchasing the convertible notes in 2027 may require significant cash reserves, in which case it may need to sell some or all of its shares. $BTC Collection. The decision marks a departure from MARA’s previous strategy of holding mined Bitcoins indefinitely, as financial issues made selling them more likely. By the end of 2025, MARA had approximately 53,822 Bitcoins on its balance sheet.
