Bitcoin Mining in Crisis: Industry Faces Profit Squeeze, Bans, and Environmental Scrutiny

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25.04.2025 79 times read 2 Comments

Bitcoin Mining Industry Faces Severe Crisis: Companies Struggle for Survival

According to Telepolis, the economic situation for many Bitcoin mining companies has deteriorated dramatically. The CoinShares Valkyrie Bitcoin Miners ETF has lost more than 50% of its value since its peak in December 2024, a much sharper decline than the Bitcoin price itself. Even the recent rise in Bitcoin's price to over $90,000 has not alleviated the situation. The hashrate, which measures how much computing power miners earn per unit, remains near a record low.

The main trigger for the crisis is the halving of Bitcoin rewards in April 2024, reducing the reward per block from 6.25 to 3.125 Bitcoins. At the same time, network difficulty has increased and transaction volumes have decreased, further eroding miners' profits. Operating costs are also rising due to tariffs on Asian imports and increasing technical complexity. Transaction fees, once a significant source of income, have also dropped sharply since the NFT hype subsided.

"Show me a miner who is really making money given the hashrate," said Paul Prager, CEO of TeraWulf Inc. "No company is really making money with mining."

There was hope in the industry to pivot towards providing infrastructure for artificial intelligence, but according to John Todaro, analyst at Needham & Co., investor sentiment has soured. Many investors are giving up, fearing that miners would have to partner with large development companies or financiers, significantly reducing their economic share.

  • CoinShares Valkyrie Bitcoin Miners ETF: -50% since December 2024
  • Block reward halved to 3.125 BTC in April 2024
  • Transaction fees and volumes down
  • Rising operating costs due to tariffs and technical demands

Summary: The Bitcoin mining sector is under immense pressure from reduced rewards, higher costs, and falling transaction fees. Market consolidation is expected, with smaller, less capitalized companies likely to exit. (Source: Telepolis)

ZA Miner Launches Free Cloud Mining Platform for Bitcoin and Dogecoin

FinanzNachrichten.de reports that ZA Miner, based in Middlesex, United Kingdom, has introduced a no-cost cloud mining platform for Bitcoin, Dogecoin, and Litecoin. New users receive a complimentary $100 trial mining contract upon registration, allowing them to explore mining without hardware purchases or setup fees.

The platform is designed for accessibility and ease of use, requiring no technical knowledge. Mining operations are located in energy-efficient regions such as Kazakhstan and Iceland, leveraging renewable or low-cost electricity. Security features include SSL encryption and anti-DDoS protection, and a referral program offers commissions for invited users.

  • $100 trial mining contract for new users
  • Supports Bitcoin, Dogecoin, and Litecoin
  • No hardware or maintenance required
  • Daily activity updates and secure dashboard
  • Operations in Kazakhstan and Iceland for sustainability

Summary: ZA Miner aims to lower entry barriers to crypto mining with a free, user-friendly cloud platform, focusing on sustainability and security. (Source: FinanzNachrichten.de)

Bitcoin Mining in the USA: Growth Amidst Challenges

According to it boltwise, the US Bitcoin mining sector is experiencing significant growth potential despite current challenges. The US government has recognized Bitcoin as a strategic resource, with President Donald Trump signing an executive order in March 2025 calling Bitcoin "digital gold" and aiming to create a strategic Bitcoin reserve.

State-level initiatives such as the Data Centers Act in Arkansas and the Commercial Digital Asset Mining Act in Oklahoma have improved the legal framework for mining activities. Technological advancements, including more efficient machines and new business models, are helping miners increase network capacity and security, even as the Bitcoin price stagnates.

However, economic conditions remain tough. The hash price has declined in recent months, and many companies are selling reserves to stay operational. Nevertheless, miners are investing in new hardware to boost efficiency and prepare for future price increases. Environmental studies suggest that flexible mining loads can accelerate the expansion of renewable energy by absorbing peak electricity demand.

  • Executive order in March 2025: Bitcoin as "digital gold"
  • Legal improvements in Arkansas and Oklahoma
  • Hash price declining, but investment in new hardware continues
  • Flexible mining supports renewable energy expansion

Summary: The US Bitcoin mining industry is supported by political and technological developments, but faces narrow margins and environmental scrutiny. (Source: it boltwise)

Ry3t Startup Heats Homes with Bitcoin Mining Waste Heat

The St. Galler Tagblatt reports on the Swiss startup Ry3t, which uses the waste heat from Bitcoin mining to heat single-family homes. The "Ry3t One" device, consisting of one or two high-performance computers, is installed in homes and connected to the water system. The computers are immersed in a special liquid that heats water to over 60 degrees Celsius, achieving a heating efficiency of 95 to 98 percent and a heating output of 7 to 14 kilowatts.

Ten Ry3t units are currently in operation across Switzerland, with 20 more sold and in production. The system is suitable for both modern and older homes, and the local energy provider TBW recommends Ry3t as an alternative where district heating or heat pumps are not feasible. The annual Bitcoin yield for an average house is about 0.02 BTC, equivalent to approximately 1,700 Swiss francs at current rates. The device costs between 14,000 and 18,000 francs, comparable to a heat pump.

  • Heating efficiency: 95–98%
  • Heating output: 7–14 kW
  • Annual Bitcoin yield: 0.02 BTC (~1,700 CHF)
  • Device cost: 14,000–18,000 CHF
  • 10 units in operation, 20 in production

Summary: Ry3t offers an innovative solution to combine home heating with Bitcoin mining, providing both warmth and cryptocurrency income, though electricity costs can be significant. (Source: St. Galler Tagblatt)

As reported by FinanceFeeds, Kuwait has officially banned Bitcoin and cryptocurrency mining, citing significant strain on the national power grid and violations of regulatory frameworks. The Ministry of Interior announced on April 22, 2025, that mining is illegal and unlicensed nationwide. Authorities discovered over 1,000 illegal mining sites, many hidden in residential areas to avoid detection.

Operators used deceptive tactics, such as turning off large household appliances to mask excessive energy consumption. The government invoked several laws to reinforce the ban, including Law No. 56 of 1996 and Law No. 31 of 1970. The Capital Markets Authority had already issued a comprehensive directive in July 2023 banning all major crypto-related activities, including mining, to align with global anti-money laundering and counter-terrorism financing standards.

  • Over 1,000 illegal mining sites discovered
  • Ban enforced under multiple national laws
  • Immediate cessation required; violators face prosecution
  • Ban aims to protect energy resources and financial system

Summary: Kuwait's strict ban on crypto mining is driven by energy concerns and regulatory compliance, reflecting a broader trend of increased scrutiny in the Gulf region. (Source: FinanceFeeds)

Bitcoin Mining: An Invisible Threat to Air Quality

A study by the Harvard T.H. Chan School of Public Health, highlighted by it boltwise, reveals that Bitcoin mining in the US significantly impacts air quality. The 34 largest Bitcoin mines in the US consumed 33% more electricity between August 2022 and July 2023 than the city of Los Angeles, leading to a substantial increase in fine particulate matter (PM2.5) pollution.

The study identified 635 power plants supplying these mines, with pollution affecting millions of Americans, especially in regions like New York City, Houston/Austin, northeast Texas, and the Illinois-Kentucky border. Pollution can cross state lines, as seen in Metropolis, Illinois, where residents are exposed to PM2.5 from a Kentucky power plant supplying a North Carolina Bitcoin mine. The researchers call for nationwide regulation and stricter emissions limits to mitigate health risks.

  • 34 largest US Bitcoin mines: 33% more electricity than Los Angeles (Aug 2022–Jul 2023)
  • 635 power plants involved
  • Significant PM2.5 pollution linked to increased cancer, heart disease, and dementia risk
  • Pollution affects millions, often across state borders

Summary: Bitcoin mining's environmental impact extends beyond energy use, posing serious air quality and public health challenges, according to recent scientific research. (Source: it boltwise)

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Honestly, I’m kind of fascinated by this Swiss Ry3t startup heating homes with Bitcoin mining rigs – that idea seems so wild at first but also kinda brilliant? I mean, if you’re gonna run those power-hungry machines anyway, might as well get *some* practical use from the heat, right? Heating water up to 60 degrees is impressive, but when they say 0.02 BTC a year for like 17k CHF... not sure that alone justifies the investment unless you’re really geeking out for Bitcoin AND need a new heating system. I guess it might pay off if BTC moons again, but right now that’s a pretty slow burn (pun intended lol).

What I’m not seeing discussed enough is how many of these new “innovations” (like cloud mining too) are kinda marketing the dream of easy money, but when you crunch the numbers, the profit margins are razor thin or just not there at all unless you’re at a huge scale or have free power. I’d be curious if anyone’s actually earned more with these home-mining heaters than just buying Bitcoin outright and using a regular boiler.

And on the environmental side, using the heat is smart, sure, but it still doesn’t fix the *source* problem, does it? Especially since most places don’t have access to cheap, green energy like Iceland or Switzerland. Ry3t might work in a “best case” scenario, but what about everywhere else?

Overall it's cool to see some creative thinking in the space even while everything’s under so much pressure, but at the end of the day I wonder how many people will really take the leap to spend thousands on something that might give you a trickle of BTC and a warm shower. Would love to hear if anyone here’s trying that, though—does your water taste like blockchain yet?
Kuwait's crackdown on illegal mining kinda shows how widespread people are willing to go off-grid just to keep their rigs running. Over a thousand secret mining sites is wild! I feel like bans like that might just push mining even further underground where it gets even harder to regulate or make it cleaner.
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