Only the largest BTC miners will survive next cycle, Marathon CEO warns
The BTC mining industry is bracing for another wave of consolidation as Marathon Digital Holdings CEO Fred Thiel warns that only the largest, most efficient miners will survive the next halving cycle. In a recent interview, Thiel said shrinking block rewards, rising competition, and high energy costs are pushing smaller operators toward the brink.
Mining profits under pressure
According to Thiel, the BTC mining landscape is increasingly a zero-sum game. “As more miners come online, the hardy rises and margins compress. Ultimately, your floor is your energy cost,” he said. With the next BTC halving scheduled for 2028, block rewards will fall from 3.125 BTC to roughly 1.56 BTC, halving miners’ earnings per block once again.
Thiel warned that unless the price of BTC surges significantly or network transaction fees increase, many miners will not be able to cover their operational costs. The impact will be felt most acutely by smaller operators without access to cheap electricity or advanced hardware. “By 2028, you’ll either be a power generator, be owned by one, or be partnered with one,” Thiel said.
Marathon, one of the largest publicly traded BTC mining firms, has spent years building large-scale infrastructure and securing low-cost power agreements. The company operates massive facilities in the U.S. and abroad, allowing it to remain profitable even during volatile market cycles.
Consolidation and diversification ahead
Thiel believes the coming years will force miners to evolve or exit. Beyond scale and energy efficiency, he noted that diversification into artificial intelligence and high-performance computing could offer new revenue streams. Several major miners have already begun converting portions of their infrastructure for AI workloads to offset declining BTC margins.
Industry analysts agree that consolidation is inevitable. Smaller mining companies relying on grid-tied energy or third-party facilities will struggle to compete against vertically integrated giants with self-owned power sources. The industry has already viewn bankruptcies and mergers in past bear markets, and the trend is expected to accelerate later than the next halving.
The BTC network’s hashrate, a measure of total mining power, continues to reach all-time highs, suggesting intense competition even as profitability declines. This has created a survival-of-the-fittest environment where only miners with scale, efficiency, and capital can sustain operations through the cycles of BTC’s economics.
Thiel summarized Marathon’s strategy as one of endurance and efficiency. “Our goal is to be in the lowest quartile of production costs,” he said. “In a tight market, 75 percent of competitors will have to shut down before we do.”
For smaller miners, the message is clear: control energy costs, innovate, or consolidate. As the BTC ecosystem matures and rewards diminish, the age of independent, small-scale mining may be nearing its end.
