A Grim Forecast for Commercial Bitcoin Mining
Once again, there is a lot of disagreement on the future of the Bitcoin mining industry. Bit Digital CEO Sam Tabar said that the industry is “going to be dead in two years. In a recent interview, he voiced concerns that reflect a growing unease about the long-term future of large-scale Bitcoin mining, particularly with another halving on the horizon. Some people in the crypto world agree with his bleak view, but others say that new ideas and energy models might keep the business going.
Tabar, whose company recently exited the mining business, insists the economics no longer add up. “The Bitcoin mining industry is going to be dead in two years,” he warned, pointing to declining profit margins and surging competition. The crux of the problem, he argues, lies in the halving cycle. Each halving event slashes miners’ block rewards in half, forcing companies to rely on soaring Bitcoin prices or cheaper energy to survive. The most recent halving, he claims, was “a disaster,” and the next scheduled for April 2028 could deliver the final blow to struggling miners.
Bit Digital’s Shift Away From Mining
Bit Digital itself is an example of the industry’s shifting dynamics. The company started in 2015 as a peer-to-peer automobile rental service in China, but in 2018, when the government cracked down on P2P lending, it switched to Bitcoin mining. Yet by June this year, the firm announced it would wind down all its mining operations across the United States, Canada, and Iceland. Instead, it has redirected its capital toward building an Ethereum-focused treasury strategy. According to Tabar, the decision was based on a harsh realization: “We realized — and I think the other miners are finally realizing this — that this is a very bad business.”
Sovereign States Enter the Bitcoin Mining Race
One of Tabar’s central arguments is that sovereign governments will soon dominate the Bitcoin mining landscape. He predicts that as Bitcoin’s price approaches $250,000, nation-states will begin mining on a large scale, adding Bitcoin to their balance sheets. Governments in many nations manage the generation of power, frequently through state-owned utilities. This is different from private miners. This gives them a unique advantage. “It doesn’t cost them anything to mine Bitcoin because they have free access to power,” Tabar claimed.
Examples are already emerging. Bhutan has quietly mined Bitcoin worth an estimated $1.4 billion by harnessing its abundant hydroelectric resources. Ethiopia has also joined the contest, and its government-run Ethiopia Electric Power now controls about 5% of the world’s Bitcoin hashrate. With surplus hydroelectricity available, reports suggest the cost of production there is as low as $20,000 per Bitcoin, compared to the commercial industry’s average of more than $100,000. In just the past year, Ethiopia’s operations are believed to have generated $220 million in revenue.
Tabar believes that as more countries follow suit, the global hashrate will skyrocket, crushing any remaining private mining firms. “Any Bitcoin mining company, private or public, cannot survive another halving and an exploding hashrate when sovereigns participate,” he said. From his perspective, this shift also resolves one of Bitcoin’s most contentious issues: the long-term security budget. If governments mine Bitcoin for strategic reasons, he argues, the security of the network will be guaranteed regardless of private sector profitability.
Alternative Visions for Bitcoin Mining
But not everyone agrees with Tabar’s pessimism. Some people claim that his prediction doesn’t take into account how creative and tough the industry is. Mati Greenspan, who started Quantum Economics, has a radically different point of view. Greenspan is looking into other kinds of energy for mining through his company Quantum Expeditions, which he started in 2023. He argues that nation-states don’t actually have “free” power, as generating electricity still requires infrastructure, maintenance, and labor. Instead, private miners who leverage wasted or stranded energy sources can secure cheaper operations. “O&G companies burn hundreds of billions of cubic feet of natural gas in Texas every year,” Greenspan noted. “They are more than happy to give it to us, and will even fund our sites.”
This view is echoed by Bitcoin mining analyst General Kenobi, who predicts that electricity companies themselves will play a major role in the industry’s evolution. He sees a future when grid operators use mining directly in their systems to help keep supply and demand stable. “Every grid operator will have Bitcoin miners because it’s the most effective and efficient way to balance the grid,” Kenobi explained. By turning rigs on during periods of excess power and shutting them off during peak demand, electricity providers can monetize surplus energy while avoiding costly grid disruptions. He even suggested such measures might have prevented Spain’s electricity grid collapse earlier this year.
Michael Saylor’s Surprising Take
Adding another layer to the debate is Michael Saylor, executive chairman of MicroStrategy and one of Bitcoin’s most prominent advocates. Tabar says that even Saylor admitted during a talk at the HC Wainwright conference last year that Bitcoin mining is a “terrible business.” Saylor is still positive about Bitcoin, but he is said to have recognized the financial problems miners are having, which supports the concept that large-scale mining may no longer be possible.
The Uncertain Road Ahead
The clash of opinions underscores just how uncertain the road ahead is for Bitcoin mining. While voices like Tabar caution that government-backed operations could eventually edge private players out of the picture, others such as Greenspan and Kenobi believe the industry still has room to thrive by harnessing overlooked energy sources and integrating more closely with power grids. The days when mining seemed like a shortcut to quick cash are gone; it has now become a much more layered sector. The mining industry is no longer what it once was; it’s being reshaped by higher expenses, growing environmental pressure, and changing world dynamics.
The mining industry is at a really important point right now, with the next halving coming up in 2028. The business might fall apart because of competition from governments, or it could come up with new and imaginative ways to make energy that are good for the environment. The only thing we can be sure of right now is that the argument over whether Bitcoin mining can survive is far from done.
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