Bitcoin Miners Squeezed: Can They Survive 2025?
Bitcoin Miners Under Pressure in 2025
The Bitcoin mining industry is feeling the strain after the 2024 halving event, which reduced miner rewards from 6.25 BTC to 3.125 BTC. Compounding the issue, the mining difficulty continues to increase, making it harder for miners to secure the network and maintain profitability.
Despite Bitcoin's price appreciation over the past year, miners are struggling to stay in the black. Crypto analyst Joao Wedson, founder and CEO of Alphractal, recently shared insights into the challenges facing the Bitcoin mining sector.
Miners May Need to Liquidate BTC Holdings
In a September 5 post on X, Wedson highlighted the unstable state of Bitcoin mining in 2025, attributing it partly to Bitcoin's high valuation relative to miner earnings during the peak years of 2017 and 2021. He noted that BTC has surged by almost 100% since the last halving.
The combination of a rising hash rate and low on-chain volume intensifies competition among miners. This necessitates investment in more efficient, and therefore expensive, equipment.
Mining Equilibrium Index (MEI)
Wedson uses the Mining Equilibrium Index (MEI) to illustrate the situation. MEI compares current mining profitability to historical averages, specifically the 30-day average revenue per hash versus the 365-day average. An MEI above 1 indicates above-average mining conditions. A value below 0.5 suggests a struggling industry potentially leading to capitulation or hashrate adjustments.
Currently, the MEI sits around 1.06. This is above levels indicating immediate crisis, but still significantly below the highs of 2.5 observed between 2017 and 2021.
Wedson suggests that the increasing operational costs could force miners to sell off some of their BTC holdings, potentially exerting downward pressure on the cryptocurrency's price.
Bitcoin Price Update
As of this writing, Bitcoin is trading around $110,700, showing little movement over the past day but a nearly 3% gain over the last week.