"Mining Industry Can't Survive Without Controlling Power"…Marathon CEO Warns of 'Mass Migration' Before Bitcoin Halving

The Bitcoin (BTC) mining industry is reaching its limits due to high-cost competition and energy burdens, and it is predicted that securing power or transitioning to artificial intelligence (AI) will be unavoidable before the next halving in 2028.

According to CoinDesk on the 11th (local time), Fred Thiel, CEO of MARA Holdings (formerly Marathon Digital), said in an interview that "Bitcoin mining is a zero-sum game," and "as mining capacity increases, competition intensifies, and profit margins ultimately converge on power prices."

Thiel said, "Hardware manufacturers are directly entering mining, and the global hashrate continues to rise," adding, "ultimately mining profitability is being pressured and the industry will be reorganized around large firms with cost competitiveness."

He particularly warned that the survival prospects for small and medium mining companies are increasingly decreasing. "Many miners are switching to AI computations or high-performance computing (HPC) infrastructure businesses," and "unless they control their own power supply chains or cooperate with power plants, survival will be difficult," he said.

Thiel pointed to the next Bitcoin halving scheduled for 2028 as a turning point for industry structure. If block rewards decrease from 3.125 BTC to about 1.5625 BTC, many miners will lose profitability unless Bitcoin prices surge or fees rise.

"Bitcoin was designed for transaction fees to eventually replace subsidies (mining rewards) in the long term, but in reality it has not reached that level," Thiel said. "If Bitcoin prices do not grow by more than 50% annually, profit structures will sharply deteriorate after 2028, and it will be worse by 2032," he added.

He also noted that recent fee spikes were merely temporary phenomena. "Trends like Ordinals or inscriptions induced temporary fee increases, but they have not become sustained revenue models," and "there is a possibility of new revenue structures emerging, such as banks pre-purchasing block space to secure settlement priority, but there are no clear changes yet," he explained.

Thiel said, "Going forward, mining will be reorganized around energy companies," emphasizing, "by 2028 miners will need to own power plants, be acquired by power companies, or at least form partnerships to survive."

He concluded, "The era of simply connecting to the grid and mining is coming to an end," forecasting, "the future of Bitcoin mining will be a game for companies that hold control over energy."