Jackson Hole, Wy. -Bitcoin miners have long been defined by the rhythm of boom and drop in the reduction cycle of half of four years. But the game has now changed, according to some of the most outstanding executives in the industry at the Salt Conference in Jackson Hole earlier this week.
The emergence of the funds quoted in exchange, the growing demand for power and the perspective of artificial intelligence (AI) Remodeling infrastructure needs means that miners must find ways to diversify or risk being left behind.
“We used to come here and talk about the HASH rate,” said Matt Schultz, CEO of Cleanspark. “Now we are talking about how to monetize the megawatts.”
For years, the mining companies, which obtained their main source of income from Bitcoin mining, lived and died from the mid -half of the four years. Each cycle, the rewards were cut in half, and the miners rushed to reduce costs or climb to survive. But that rhythm, according to these executives, no longer defines the business.
“The four -year cycle is effectively broken with the maturation of Bitcoin as a strategic asset, with the ETF and now the strategic treasure and other things,” said Schultz. “The adoption is promoting demand. If you read something about the most recent ETF, they have infinitely consumed more bitcoin than they have generated so far this year.”
Cleanspark, which now operates 800 megawatts of energy infrastructure and has another 1.2 Gigawatts in development, has begun to direct its attention beyond the work test. “Our speed to market with electricity has created opportunities in such a way that we can now look for ways to monetize energy beyond Bitcoin mining,” he said. “With 33 locations, we now have much more flexibility than ever before.”
A brutal business
Schultz is not alone when calling the monumental change of industry in the business model.
Patrick Fleury, CFO of Terawulf, echoed the feeling and did not try to sweeten the gain that the miners now feel.
“Bitcoin Mining is an incredibly difficult business,” he said. He broke the Bitcoin mining economy in direct terms: with electricity at a price of five cents per kilowatt hour, it currently costs about $ 60,000 to extract a single bitcoin. At a Bitcoin price of $ 115,000, that means that half of the income is consumed only by power. Once corporate expenses and other operating costs are taken into account, margins harden rapidly. In his opinion, profitability in mining depends almost completely on ensuring the power of ultra -low cost.
For Fleury, the deepest problem is not just energy costs: it is the relentless expansion of the network itself, driven by hardware manufacturers with few incentives to decrease.
Bitmain said, which continues to produce mining platforms regardless of market demand, thanks to its direct channeling to chips manufacturers such as TSMC. Even when the miners are not buying, the company can display machines in regions with ultra cheap electricity, from the United States to Pakistan, flooding the network with HASH energy and increasing the mining difficulty. That global footprint, along with the low production costs, allows Bitmain to remain profitable while squeezing the margins for everyone else.
Even so, Terawulf is turning aggressively. Last week, he signed an agreement supported by lease $ 6.7 billion with Google to convert hundreds of mining infrastructure megawatts into the data center space.
“These things, as everyone can attest from here, such as electrical infrastructure, do not move quickly,” Fleury said. “Technology is used to moving quickly and breaking things, but these offers take a long time to unite. It took us four to five months of very intense due diligence.”
“What makes me more proud of that transaction was really working collectively with those partners to find a new mice trap that I hope now becomes something that the industry can duplicate in other companies,” he said. “Google provides $ 3.2 billion support for leasing obligation to support Terawulf, which effectively allows me to leave and ensure financing at a really efficient capital cost.”
Profitability or patience
Kent Draper, commercial director of Iren, took a calmer but safe posture. His Bitcoin mining company profitably, even today, he said. Even so, he told a common denominator: power.
“Being a low cost producer is fundamentally important, and this is how we have always focused our business: having control of our sites, having operational control, being in areas that are low -cost jurisdictions,” Draper said.
Iran, according to him, is currently operating to 50 exahash, which translates into an annual rate of income of one billion dollars in the current conditions of the Bitcoin market. He pointed out that the gross margins of the company, income less electricity costs, are 75%, and even after taking into account the general expenses and expenses of SG & A, Iren maintains an Ebitda margin of 65%, or approximately $ 650 million in annualized profits.
Even so, I will even stop its expansion in mining. “That is really dictated only by the set of opportunities we see on the side of AI today and the potential to really diversify the sources of income within our business, instead of a fundamental opinion that Bitcoin mining is no longer attractive,” Draper said.
On the AI side, Iren is studying both the location and the cloud. “Capital intensity is very different,” Draper said. “If you own the GPUs in the upper part of the infrastructure of the data center, that is 3 times the investment. On the cloud side, the recovery periods tend to be much faster, typically, about two years only in the investment of the GPU.”
Holding Bitcoin, and the line
For Digital Marathon (Mara) CFO Salman Khan, survival is agility. With decades in the oil industry, Khan sees a family pattern: boom, bust, consolidation and constant career to stay efficient.
“This reminds me of these trends in cycle industries exposed to basic products,” Khan said. “There are some very rich families in the oil sector that made billions, and then there are others that have presented bankruptcies. It must have a strong balance to survive these cycles.”
Marathon has Bitcoin in his balance, something Khan said it was worth it. “We are not a treasure company, we are not a strategy, but we like to have that coverage if the price of Bitcoin increases.”
More recently, Marathon announced a majority participation in Exaion. “The angle we have in the front of AI is to calculate on the edge,” Khan said. “We like Sovereign Compute, which allows people to better control their data in a closer location.
Beyond Bitcoin, behind the network
Despite the different points of view and strategies, everything is reduced to a common factor: power. If it was being used to extract bitcoin, AI power or balance electrical networks, energy, not the hash rate, it was the conversation currency.
“We cut our energy consumption for 120 hours a year,” said Schultz de Cleanspark. “We can avoid approximately one third of our total energy costs. Therefore, that flexible load is important.”
Cleanspark, he added, has spent last year in silence megawatts throughout the country. “You mentioned Georgia,” Schultz said. “We have 100 megawatts that surround the Atlanta airport. That is an excellent example. We have focused on being the valuable partner for some of these rural service companies to monetize the megawatts stranded.”
Still about Bitcoin, for now
Despite the growing approach to AI, the panelists made it clear that Bitcoin is still central to their businesses, for now. When asked why mining companies still deserve the attention of investors, the responses pointed to the scale, the efficiency of profitability and the ability to resist volatility.
Fleury emphasized that the contracted energy capacity of Terawulf could generate a substantial cash flow, comparing the economy with established data centers. Khan pointed out a disconnection between Bitcoin Holdings in Marathon and its market assessment, suggesting that the main mining business is overlooking. Draper stressed the operational efficiency of Iren and the low -cost footprint, citing recent performance metrics that placed the company ahead of other public miners.
And although the future may include cloud infrastructure and edge computation, Schultz argued that Bitcoin itself could evolve to something larger, a fundamental layer for energy systems. As he said, the next phase may not be about speculation, but Bitcoin’s role in helping to balance energy networks.
Read more: Bitcoin mining costs shoot when Hashrate reaches the records: Theminermag
