A Brief Analysis of the Bitcoin Mining Market from 2024 to 2025

The prospects of mining (cryptocurrency mining) are influenced by various factors, including technology, market, regulation, and environment. The following is a comprehensive analysis of the current mining industry and prospects for future trends:

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### **1. Industry Status**
-Bitcoin halving effect: In April 2024, Bitcoin completed its fourth halving, with block rewards dropping from 6.25 BTC to 3.125 BTC. Miners' income decreased in the short term and they relied on the rise in coin prices to maintain profitability in the long term.
-Competition in computing power: With the continuous growth of computing power across the entire network (exceeding 600 EH/s by 2025), miners need to upgrade their efficient equipment (such as Ant S21, Shenma M60, etc.) to maintain competitiveness.
-Energy cost: Electricity accounts for 60% -70% of Bitcoin mining costs, and cheap electricity (such as Middle Eastern oil associated gas and Latin American hydropower) has become a key advantage.

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### **2. Analysis of influencing factors**
####* * (1) Market factors**
-Currency price fluctuations: If Bitcoin enters a bull market (such as breaking through $100000), miners' profits will significantly increase; Conversely, a bear market may lead to the closure of small and medium-sized mining sites.
-* * Alternative Currency * *: After Ethereum switched to PoS, GPU miners turned to small currencies such as ETC and RVN, but the returns were much lower than historical levels.

####* * (2) Policy and Regulation**
-Developed countries: After the approval of Bitcoin ETFs by the US SEC, compliance has accelerated, but some states (such as New York) restrict fossil fuel mining.
-* * Emerging markets * *: Middle East (UAE), Latin America (Paraguay) launch tax incentives to attract mining sites; Southeast Asia (Malaysia) cracking down on illegal mining.
-* * China * *: After the comprehensive clearance in 2021, some miners returned through offshore entities (Hong Kong, Singapore).

####* * (3) Technological Evolution**
-* * Mining machine iteration * *: 3nm chip mining machines (with energy efficiency ratios below 20J/TH) are gradually becoming popular, and old models (such as the S19 series) are facing elimination.
-Cooling technology: Immersion cooling can reduce energy consumption by 30%, but increase initial investment by 50%.

####* * (4) Environmental pressure**
-The Bitcoin network consumes approximately 150 billion kilowatt hours of electricity annually (exceeding the national electricity consumption of the Philippines), and the European Union plans to include PoW in the negative list of sustainable financial taxation.

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### **3. Future trend prediction**
-Short term (1-2 years):
-The integration of mining enterprises is accelerating, and listed giants such as Marathon and Riot are acquiring small and medium-sized mines through capital advantages.
-North America accounts for over 40% of Bitcoin's computing power (approximately 35% by 2024), and geopolitical risks are diversified.
-Mid term (3-5 years):
-The mining machine chip is approaching the physical limit (below 1nm), and the marginal improvement in energy efficiency decreases.
-The proportion of renewable energy mining may reach 60% (about 40% by 2024), and carbon credit trading has become a new source of income.
-Long term (5-10 years):
-Bitcoin mining has entered the "era of low profits", with miners' main income shifting towards transaction fees (expected to account for over 50% of fees by 2040).
-Quantum computing poses a threat to traditional encryption algorithms and may trigger a revolution in underlying mining technologies.

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### **4. Risk statement
-Policy risk: 30% of countries worldwide may follow the IMF's recommendation to impose taxes on PoW.
-* * Technical risk * *: The residual value rate of ASIC mining machines is low (depreciating by over 90% after 3 years).
-Market risk: If stablecoins/USDCs replace BTC as the mainstream settlement tool, mining demand will shrink.

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### **5. Investment advice
-* * Suitable for people * *:
-Having electricity resources below 0.05 USD/kWh (such as Central Asian natural gas and Chilean photovoltaics).
-Institutional investors who can withstand investment cycles of more than 3 years.
-* * Avoid crowds * *:
-Individual miners who rely on residential electricity (electricity price>0.12 USD/kWh).
-Investors who are sensitive to the volatility of cryptocurrencies.

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###* * Conclusion**
Mining still has investment value, but it has shifted from "grassroots profiteering" to "specialized heavy asset operation". Future profits depend on:
1. Energy acquisition capability
2. Capital expenditure efficiency
3. Financial instruments for hedging market volatility, such as cloud computing futures and option hedging.

Suggestions for continued attention: US energy policies, production capacity allocation of chip foundries (TSMC/Samsung), and development of Bitcoin Layer2 (such as Lightning Network reducing on chain fee dependence).