Bitcoin’s mining industry is feeling growing strain as the key profitability gauge, hash price, slides toward levels that could push smaller operators offline and put pressure on mining equipment providers and service partners.
That dip toward the $40 mark is forcing some smaller and less efficient miners to weigh powering down their rigs. Reports have disclosed that when revenue falls this far, operators with thin margins can no longer cover power and maintenance bills.
Some manufacturers have started mining with their own machines to offset weaker customer demand. Bitdeer and similar firms have been reported to expand self-mining operations to fill gaps in sales.
High capital costs and steady increases in hashrate make running ASIC farms tougher, especially after the April 2024 halving cut the block reward to 3.125 BTC.
Back in 2009, the block reward was 50 BTC and people could mine with CPUs. Today, only specialized hardware makes mining viable for most operators. That shift has pushed some companies to convert capacity into general compute for AI workloads.
IREN later agreed to provide GPU services to Microsoft in a contract valued at $9.7 billion. These moves are meant to bring steady revenue when Bitcoin mining profits shrink.
Bitcoin’s price weakness has compounded the problem. The token briefly fell below $100,000, trading as much as 20% below the October 6 high of above $126,000.
Analysts point to heavy selling by long-term holders: since late June, net sales from that group have topped 1 million bitcoin, according to Compass Point analyst Ed Engel.
A large liquidation of leveraged positions on Oct. 10 also shook the market and knocked out support levels near $117,000 and $112,000.
Markus Thielen, founder and CEO of 10X Research, said the market’s failure to reclaim key levels suggests bearish conditions, and his firm maintains that bitcoin could still fall further before a bottom appears.
His team had earlier forecast a drop to $100,000 and now says a buyable bottom may be “a few weeks away.”
Featured image from Pexels, chart from TradingView
