MARA CEO: Bitcoin Miners Must Secure Energy or Exit the Game Before 2028 Halving
Bitcoin miners face a narrowing path to survival as energy costs rise and rewards shrink, according to MARA Holdings (MARA) CEO Fred Thiel, who warns that only firms controlling their own power sources or pivoting to new industries will endure the next halving cycle.
“Bitcoin mining is a zero-sum game,” Thiel told CoinDesk. “As more people add capacity, it gets harder for everybody else. Margins compress, and the floor is your energy cost.”
Thiel described a rapidly maturing, more cutthroat industry, where profitability hinges on efficiency and power control. Many miners, he noted, are branching out into artificial intelligence (AI) and high-performance computing (HPC) to diversify their income. Meanwhile, hardware manufacturers and large operators with in-house infrastructure are outpacing traditional mining firms.
“You now have hardware vendors running their own mining operations because customers aren’t buying as much equipment,” Thiel said. “The global hashrate keeps climbing, which means everyone’s margins keep shrinking.”
Survival After the Next Halving
The next Bitcoin halving in 2028 will cut block rewards to roughly 1.5 BTC, further reducing profitability. Unless transaction fees increase or Bitcoin’s price climbs substantially, many miners will be forced out of the market.
“Bitcoin was designed so that transaction fees would eventually replace the subsidy,” Thiel said. “But that hasn’t happened. If Bitcoin doesn’t grow at least 50% annually, the math gets very tough after 2028 — and even tougher in 2032.”
Although the Bitcoin network has seen short bursts of high fees from trends like Ordinals and inscriptions, Thiel said those spikes haven’t lasted long enough to meaningfully offset block reward reductions. He suggested that long-term sustainability may depend on innovations such as financial institutions pre-purchasing block space for guaranteed transaction priority, but acknowledged that model hasn’t taken hold.
Power, Scale, and the Future of Mining
With profitability tightening, industry consolidation is accelerating. Larger players are securing direct access to energy or investing in AI and data center infrastructure, while smaller miners struggle to stay afloat.
“Our goal is to be in the lowest quartile of production costs,” Thiel said. “In a tight market, 75% of the other guys have to shut down before we do.”
Thiel expects the mining landscape to be transformed by 2028. “By then, you’ll either be a power generator, be owned by one, or be partnered with one,” he said. “The days of miners just plugging into the grid are numbered.”
