Bitcoin Mining Industry Gains Momentum Despite Profit Squeeze

Despite the current challenging environment, the bitcoin mining industry in the U.S. is showing signs of consolidation and renewed momentum. The industry is facing its most severe profit squeeze in five years, yet several factors are driving growth. The U.S. government has recognized bitcoin’s proof-of-work as a strategic resource, state legislatures are providing regulatory clarity, and manufacturers are delivering more efficient mining machines. Additionally, entrepreneurs are developing new revenue models that combine mining with digital collectibles and flexible-load grid services. These developments are contributing to the continued increase in network hashrate, even as hashprice remains low and publicly traded miners sell off inventory.

One of the most significant developments came on March 6, 2025, when the President signed an executive order establishing a Strategic Bitcoin Reserve. This order directs the Treasury to hold forfeited coins and authorizes research into budget-neutral accumulation methods. The order highlights the strategic advantage of being an early adopter of a Strategic Bitcoin Reserve due to bitcoin’s fixed supply and refers to it as "digital gold" because of its scarcity and security. This policy shift is expected to provide a tailwind for the bitcoin mining industry, as it aligns miners with national energy policy rather than against it.

At the state level, several regions have implemented legislation to support bitcoin mining. Arkansas passed the Data Centers Act of 2023, which classifies mining as protected industrial activity and limits local zoning interference. Oklahoma followed with the Commercial Digital Asset Mining Act in 2024, offering sales-tax relief on rigs and power contracts. Texas updated its HB 1666 to balance custody standards with grid-integration incentives, demonstrating that states view miners as high-load customers rather than environmental threats. These state-level policies provide a supportive regulatory environment for bitcoin mining operations.

Federal industrial policy is also playing a role in supporting the bitcoin mining industry. In the summer of 2025, Block’s Proto team signed an agreement to supply Core Scientific with 3 nm modular rigs and publish design files for local manufacturing. This move reduces supply-chain risk and eliminates import tariffs on Chinese hardware, which could soon exceed 100%. By incorporating U.S. fabrication into the mining cost stack, this agreement supports domestic production and reduces reliance on foreign hardware.

Environmental concerns, once a significant barrier to bitcoin mining, have largely been addressed. A recent review by Duke University found that flexible bitcoin mining loads could absorb up to 76 GW of new demand with minimal curtailment, reducing the need for peaker plants and accelerating renewable energy integration. The Bitcoin Policy Institute’s survey of ten North American miners found real-time curtailment rates between five and thirty-one percent, demonstrating that miners routinely shed load during price spikes. These studies support the idea that mining can coexist with renewable energy sources and contribute to grid stability.

Technological advancements and innovative business models are also reshaping the economics of bitcoin mining. The network hashrate averaged 910 EH/s in mid-April, up forty-four percent year-on-year, despite bitcoin’s sideways price movement. The average all-in U.S. production expense sits at about $92,000 per coin, only seven percent above the market quote. This narrow margin is bearable for firms that are not overleveraged, and the continued rise in hashrate indicates that miners are willing to invest long-term capital to continue operating. One project seeks to tie ordinal inscriptions to real megawatts and share monthly mining revenue with token holders, capitalizing on the popularity of speculative digital collectibles to support mining infrastructure expansion.

Tether’s announcement in April to direct both existing and future hashrate to Luke Dashjr’s Ocean pool is another example of innovation in the industry. Ocean’s open-source DATUM protocol allows individual miners to construct their own block templates, addressing censorship risk and restoring network security. Solo mining, while statistically improbable, also plays a cultural role in preserving permissionless entry and checking industrial centralization. On March 10, 2025, a solo miner using a Bitaxe 204 Ultra mined block #887,212, securing a reward of 3.15 BTC, valued at about $263,000 at the time. Such wins inspire hobbyists and underscore the importance of decentralization in the mining industry.

Despite the current tight economics of mining, with a 28% drop in hashprice since January, the industry is not capitulating. Hardware orders in late March reached new records, indicating that operators are upgrading to more efficient rigs. Network-wide efficiency gains, flexible-load contracts, and a supportive policy backdrop are driving this expansion. The White House order positions bitcoin as a reserve commodity, aligning miners with national energy policy. State statutes offer durable property-right protections, and open-source hardware and novel business models are broadening the capital base. As long as energy remains abundant and investors believe in long-run appreciation, hashrate will continue to rise, despite short-term challenges.

In summary, the bitcoin mining industry in the U.S. is poised for growth despite current short-term pain. Regulatory recognition, domestic chip production, innovative financing, and a push toward decentralized block construction have set the stage for the next growth phase in American mining. While margins may be thin, structural changes in the U.S. economy favor the industry in the medium term, positioning it for sustained growth and increased security for the bitcoin network.