The Critical Point of Mining Economics: How Cryptocurrency Mining Companies Seek Survival Amid Profit Compression

Bitcoin prices hover around $90,770, and the entire cryptocurrency mining industry is facing an invisible crisis. This is not an acute problem caused by a sharp price drop, but a chronic economic squeeze—the imbalance between miners’ cost structures and revenue models is pushing many small and medium miners to the brink of survival.

Fixed income, rising costs

The Bitcoin protocol has an embedded seemingly stable income mechanism: a mining reward of 3.125 BTC per block, with a new block generated approximately every 10 minutes. This means global miners earn about 450 new bitcoins daily. Over 30 days, the total output is approximately 13,500 BTC. At current prices, the monthly total revenue is about $1.18 billion.

This number looks huge at first glance, but when distributed across the entire network’s hash rate of 1,078 EH/s, the average daily income per unit of hash power (TH/s) is only $0.036—this is the entire economic basis for maintaining a network valued at $1.7 trillion in market capitalization.

The problem is that this fixed income must contend with fluctuating costs. Electricity expenditure is the largest variable, directly determining miners’ profit margins.

The truth about cost structures: the gap between cash flow and accounting profit

On the surface, miners using the latest S21 models (17 J/TH) and enjoying cheap electricity still have decent cash returns at a Bitcoin price of $88,000. But reality is much more complex.

According to Cambridge University data, the cash cost to mine one Bitcoin is about $58,500. Marathon Digital, as the world’s largest publicly traded Bitcoin mining company, had electricity costs of $39,235 per Bitcoin in Q3; the second-largest company, Riot Platforms, had costs of $46,324.

From a cash flow perspective, these two companies are still profitable at the $90K price point. But this is just the tip of the iceberg.

The real cost nightmare comes from non-cash expenses: equipment depreciation, asset impairments, and stock-based compensation. Once these factors are included, the total cost per Bitcoin easily exceeds $100,000. Marathon Digital’s true total cost is around $110,000, and industry consensus estimates it at about $106,000.

This means that at a Bitcoin price of $90,000, many miners are already in accounting losses—even though their daily cash flow remains positive.

Two worlds of miners

The cryptocurrency mining industry is splitting into two distinctly different ecosystems:

First tier: Large industrial miners with modern machines, low-cost electricity, and light asset liabilities. For them, only when Bitcoin drops below $50,000 does their daily cash flow turn negative. Currently, their cash profit per Bitcoin exceeds $40,000, with book profits depending on their financial structures.

Second tier: All other miners. Once depreciation and other accounting costs are included, they struggle to break even. Even with conservative total costs estimated between $90,000 and $110,000, many small and medium miners are operating below the economic equilibrium point.

This contradiction has led to an interesting phenomenon: more and more miners are choosing to hoard mined Bitcoin or even buy additional on the market rather than sell immediately. The BTC reserves of large mining companies are at historic highs. This is not speculation but survival—when cash flow is positive but book profits are negative, continuing to mine and accumulate assets becomes a rational choice.

Fragile balance

The current system is in a delicate equilibrium. As long as Bitcoin stays around $88,000, large miners’ cash flows remain positive, allowing the industry to barely function. But this balance is extremely sensitive:

• If network difficulty rises again, unit hash rate earnings decline
• If Bitcoin prices fall further
• If electricity costs continue to increase
• If miners’ financing channels tighten

Any adverse change could break the entire growth cycle of the industry. Small and medium miners may be forced to liquidate positions, while large mining firms will need to seek auxiliary businesses, turning Bitcoin mining from a profit center into a cost center.

The risk has not yet materialized, but warning signs are flashing. This time, the crisis will not come from a sharp drop but from the fatigue of the seemingly stable economic structure itself.