BIT Research: The 2028 Halving is Not the Endpoint, the Real Shakeout in Bitcoin Mining Has Just Begun
- Core Thesis: The Bitcoin mining industry is currently undergoing a structural adjustment. Miner profitability is deteriorating due to declining block subsidies and weak fee revenue. The sector is transitioning from a "mining business" to an "infrastructure business," and the 2028 halving will accelerate industry consolidation.
- Key Factors:
- With Bitcoin's price around $61,000 and the network's total hashrate nearing 1 ZH/s, the gap between miners' theoretical daily revenue and actual income has reached 136%, indicating a persistent divergence in profitability.
- Calculations show the lower bound for Bitcoin production cost is approximately $46,744, while the industry's overall breakeven price is around $65,000. Current mining operations struggle to sustain ideal profitability.
- In 2025, total miner revenue was approximately $17.2 billion, with electricity costs accounting for about $12.3 billion, or 71.5% of total revenue, highlighting significant cost pressure.
- Miners' average daily transaction fee revenue is only $220,000, far below the historically implied level of roughly $9.7 million, indicating that the revenue structure has yet to transition to being fee-driven.
- After the 2028 halving, the lower bound of production costs is expected to rise to approximately $93,289, accelerating the concentration of the industry toward well-capitalized, diversified institutional mining firms.
- Mining companies are pivoting from pure mining to infrastructure operations, with the key competitive battleground shifting from hashrate expansion to business models, such as energy management and AI/HPC computing hosting.
The Bitcoin mining industry is currently undergoing its most complex structural adjustment since the protocol's inception. Although the Bitcoin price remains around $61,000 and the network's total hashrate is near an all-time high of approximately 1 ZH/s, miner profitability continues to deteriorate. Multiple indicators, including production costs, fee revenue, hashrate expansion, and the industry's security budget, suggest that mining operations are currently running close to the breakeven point. The halving in 2028 is expected to further accelerate market consolidation.
Current data indicates that the challenges facing the mining industry stem not only from the reduction in block subsidies due to the halving but also from the fact that the industry's revenue structure has yet to fully transition to a fee-driven model. Simultaneously, a growing number of mining companies are pivoting from being pure Bitcoin producers to becoming infrastructure operators, energy operators, and providers of AI/HPC computing power infrastructure. In this process, the focus of competition within the mining industry is gradually shifting from hashrate expansion to business model upgrades.
Continued Pressure on Profitability: The Mining Economic Model Enters a Re-evaluation Phase
The PoW Difficulty/Issuance model shows that the lower bound of Bitcoin's current production cost is approximately $46,744. Historically, when prices have fallen near this level, it has often signaled the exit of marginal miners and corresponded with the formation of cyclical bottoms. However, what is more noteworthy now is that miner revenue and the Bitcoin price have diverged persistently for the first time in history.
Data shows that at a Bitcoin price of around $61,000, the theoretical daily revenue for all network miners should be approximately $78 million. However, the actual daily revenue is only about $33 million, representing a 136% shortfall. Meanwhile, while the network's hashrate approaches 1 ZH/s, fee income remains persistently low, currently averaging only about $220,000 per day, far below the roughly $9.7 million implied by historical relationships. As the halving continues to compress new coin issuance, the Bitcoin mining industry is facing growing profitability pressure.
From Mining to Infrastructure: The 2028 Halving May Drive Industry Restructuring
Beyond declining revenue, mining companies also face increasing cost pressures. In 2025, total revenue for Bitcoin miners was approximately $17.2 billion, with electricity costs alone accounting for about $12.3 billion, or 71.5% of total revenue. Global investment in mining hardware totaled around $4.5 billion. Comprehensive estimates suggest the industry-wide breakeven price is currently around $65,000, meaning that at current price levels, relying solely on mining operations is no longer sufficient to maintain ideal profitability.
It is estimated that after the 2028 halving, the lower bound of Bitcoin's production cost will further rise to approximately $93,289. The industry will accelerate its consolidation towards a few large, well-capitalized miners with diversified revenue streams. Compared to traditional miners reliant on block rewards, institutionalized mining firms with access to low-cost electricity, AI/HPC computing power hosting businesses, and stronger balance sheets are likely to gain a greater competitive advantage in the next cycle.
Overall, the Bitcoin mining industry is undergoing a profound transformation from a "mining business" to an "infrastructure business." As block subsidies continue to decline, relying solely on Bitcoin production will become increasingly difficult to sustain long-term profitability. The industry's future will depend more on diversified revenue sources such as energy management and AI/HPC computing power hosting. For investors, what truly merits attention is not the halving itself, but identifying which mining companies can successfully execute their business model transformation and establish more resilient competitive advantages within the new industry landscape.
Some of the above insights are from BIT on Target. Contact us to receive the full BIT on Target report.
Disclaimer: The market involves risk and investment requires caution. This article does not constitute investment advice. Digital asset trading may involve significant risk and instability. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. BIT is not responsible for any investment decisions made based on the information provided in this content.
