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Fred Thiel: Bitcoin mining is becoming unprofitable
Thiel acknowledged that many miners are currently struggling due to fierce competition, increasing electricity demand, and declining profitability. The MARA CEO described mining as a “zero-sum game,” explaining that it becomes harder for participants as more people join in. This means that due to the reduction in miner rewards (halving), which occurs every four years, miners earn less profit, while their electricity costs remain the same — and those are only the minimal expenses.
For this reason, major mining companies are shifting their focus to adjacent fields such as artificial intelligence (AI) or high-performance computing (HPC), Thiel explained. Many miners find it difficult to compete with companies that use their own equipment with minimal costs — such as large mining hardware manufacturers and firms like Tether that possess substantial resources.
The MARA chief warned that after the upcoming Bitcoin halving in 2028, the situation for miners could worsen further. By that time, the block reward will decrease to 1.5 BTC. If transaction fees do not rise and the Bitcoin price does not increase by at least 50% per year, mining could become unprofitable. And by 2032, things may be even more difficult for miners, Thiel cautioned.
“By 2028, miners will have to generate their own electricity, become part of power-generation companies, or form strategic alliances with them. The era of miners directly connected to the power grid is coming to an end,” Thiel said.
Earlier, the MARA CEO proposed that the U.S. government build up its national crypto reserve through Bitcoin mining rather than purchases, otherwise creating a strategic BTC reserve would be meaningless.
