What You Should Know

• Miners drawing power from traditional grids might struggle post the 2028 halving event.
• Bitcoin miners need to develop a unique strategy or risk being merely price receivers in a toughening market.
• MARA’s stock increased after exceeding fourth-quarter sales forecasts.

Bitcoin miners relying on grid power sources are expected to face difficulties after the forthcoming halving in 2028, according to a shareholder letter from MARA Holdings (source).
“For those miners still reliant on grid-attached energy, the prognosis is grim. Energy expenditures will keep climbing. The 2028 halving might trigger another industry-wide reckoning. Many could be unable to survive,” stated the letter.

This announcement arrives as the mining sector has been grappling with profitability challenges since a recent halving event halved reward payouts, compelling some miners to diversify into high-performance computing (HPC) and artificial intelligence (AI).

Read more: AI Is Here, but That Doesn’t Mean Bitcoin Miners Are Finished: Blockspace

MARA, a key player in the bitcoin mining landscape, indicated that miners will need to stand out amidst stiff competition or face dwindling profitability. “Those unable to carve out a niche will become price takers in an ever-more competitive environment.”

MARA’s proposed solution is to secure affordable energy, integrate their operations vertically, and expand beyond traditional bitcoin mining endeavors, hinting at catering to other computing sectors like AI and HPC.

“Our capacity to acquire sites and generate low-cost energy, optimize underused hardware and energy assets, and operate a vertically integrated model—from software and hardware to energy generation—will enhance our cost control,” MARA stated. Recently, they acquired a Texas wind farm, which aims to lower their power expenses.

Additionally, MARA has intensified its development and sales of data center infrastructure, essential for various computing demands.

“Whether for bitcoin mining or AI services, we believe our technologies will empower others to innovate while MARA provides the tools for deploying new systems and services, such as energy management and infrastructure,” MARA commented.

In a recent earnings report, MARA posted sales of $214.4 million, surpassing the average analyst expectation of $187.8 million per FactSet data. Following this, MARA stock saw an over 8% surge in after-hours trading, while bitcoin experienced a 4.2% drop on Wednesday.