BIT Research: The 2028 Halving Is Not the End; 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 low fee income. The industry is transitioning from a "mining business" to an "infrastructure business," and the 2028 halving will accelerate the industry's shakeout.
- Key Factors:
- With Bitcoin trading near $61,000 and the network hashrate approaching 1 ZH/s, the gap between miners' theoretical daily revenue and actual revenue has reached 136%, indicating a persistent divergence in profitability.
- Estimates show that the lower bound of Bitcoin's production cost is approximately $46,744, while the industry's average break-even price is around $65,000. Under current conditions, mining operations can barely sustain ideal profitability.
- In 2025, total miner revenue is estimated at 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 fee income stands at only $220,000, far below the historical relationship implied value of approximately $9.7 million. The transition of the revenue structure to being fee-driven has not yet been completed.
- Following the 2028 halving, the lower bound of production cost is expected to rise to about $93,289, which will accelerate industry consolidation toward well-capitalized, diversified institutional mining firms.
- Mining companies are pivoting from pure mining operations to infrastructure operators. The primary competitive arena is shifting from hashrate expansion to business model innovation, 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 1 ZH/s, close to historical highs, miner profitability continues to deteriorate. Multiple indicators, including production costs, fee income, hashrate expansion, and industry security budget, show that the mining industry is currently operating near the breakeven point. The 2028 halving is expected to further accelerate industry consolidation.
Current data suggests the challenges facing the mining industry stem not only from the reduced block subsidy post-halving but also from the industry's incomplete transition to a fee-driven revenue structure. Meanwhile, a growing number of mining companies are pivoting from being pure Bitcoin producers to infrastructure operators, energy operators, and AI/HPC computing power infrastructure providers. In this process, the competitive focus of the mining industry is also gradually shifting from hashrate expansion to business model upgrades.
Profitability Under Continued Pressure: Re-evaluating the Mining Economic Model
The PoW difficulty/issuance model indicates that the lower bound of Bitcoin's current production cost is approximately $46,744. Historically, when prices have fallen near this level, it often signified marginal miners exiting the market, corresponding to the formation of a cyclical bottom. However, what is more noteworthy now is that miner revenue and Bitcoin price are showing their first-ever sustained divergence.
Data shows that at a Bitcoin price of around $61,000, the theoretical daily revenue for all network miners should be approximately $78 million, but the actual figure is only about $33 million, representing a theoretical revenue roughly 136% higher than reality. Meanwhile, the network's total hashrate is approaching 1 ZH/s, yet fee income remains persistently low, currently averaging only about $220,000 per day, significantly below the approximately $9.7 million implied by historical relationships. As the halving continues to compress new issuance, the Bitcoin mining industry faces increasing profitability pressure.
From Mining to Infrastructure: The 2028 Halving May Drive Industry Restructuring
Beyond declining revenue, cost pressures for mining companies are also increasing. In 2025, total revenue for Bitcoin miners was approximately $17.2 billion, of which electricity costs alone accounted for about $12.3 billion, or 71.5% of total revenue; global investment in mining hardware was about $4.5 billion. Comprehensive calculations suggest the current industry-wide breakeven price is around $65,000, meaning that at the current price level, relying solely on mining operations is insufficient to maintain ideal profitability levels.
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 consolidation, concentrating among a few large, well-capitalized mining companies with diversified revenue streams. Compared to traditional miners reliant on block rewards, institutionalized mining firms with access to low-cost power resources, AI/HPC computing power hosting services, and stronger balance sheet capabilities are likely to gain a stronger competitive advantage in the new 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 be unsustainable for 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 warrants attention is not just the halving itself, but which mining companies can successfully execute a business model transformation and build more resilient competitive advantages within the new industry landscape.
The above insights are partly sourced from BIT on Target. Contact us to get the full BIT on Target report.
Disclaimer: The market carries risks, and investment requires caution. This article does not constitute investment advice. Digital asset trading may involve significant risks and instability. Investment decisions should be made after carefully considering personal circumstances and consulting with financial professionals. BIT is not responsible for any investment decisions made based on the information provided in this content.
