MARA CEO Warns: Only Miners With Energy Control Will Survive the Next Halving
Bitcoin’s mining sector is on the brink of a major shakeout, with shrinking rewards, rising power costs, and intensifying competition setting the stage for consolidation, according to MARA Holdings (MARA) CEO Fred Thiel.
“Bitcoin mining is a zero-sum game,” Thiel said in an interview with CoinDesk. “Every time new capacity comes online, it squeezes everyone else. Margins tighten, and your energy cost becomes the absolute floor.”
Thiel described a rapidly maturing industry in which only miners with access to cheap, reliable power — or diversified business models — are likely to endure. Increasingly, firms are branching into adjacent sectors like artificial intelligence (AI) and high-performance computing (HPC) to offset pressure from declining profitability.
“Hardware manufacturers are now running their own mining operations because customers aren’t buying as much gear,” he said. “The global hashrate keeps climbing, and that means everyone’s margins keep falling.”
Halving Looms Large
The next Bitcoin halving in 2028 will reduce block rewards to just over 1.5 BTC — a change that could render many operations unprofitable unless transaction fees surge or Bitcoin’s price rallies substantially.
“Bitcoin was built on the assumption that fees would eventually replace the subsidy,” Thiel said. “That hasn’t happened yet. If Bitcoin doesn’t grow at 50% or more per year, the economics become extremely difficult after 2028 — and even worse by 2032.”
While brief spikes in network fees have occurred, particularly during periods like the Ordinals boom, they’ve proven too inconsistent to sustain miners long-term. Thiel noted that some are watching for potential new revenue models — such as banks pre-purchasing block space for settlement guarantees — but none have yet materialized.
Consolidation and Power Control
As the economics of mining tighten, Thiel believes survival will hinge on power control and cost efficiency. Larger firms are increasingly integrating vertically, owning or partnering with power producers, while smaller operators are being squeezed out.
“Our strategy is simple — stay in the lowest cost quartile globally,” Thiel said. “Because when margins collapse, three-quarters of the market has to shut down before we do.”
He expects the industry to self-correct through attrition as weaker miners fail to remain profitable. “By 2028, you’ll either be a power generator, owned by one, or partnered with one,” Thiel added. “The era of plug-and-play mining is ending.”
