As competition returns after the halving, small-scale Bitcoin miners now have an advantage over larger competitors in the industry. The Bitcoin mining industry is currently becoming more competitive as these mid-tier operators are increasing their achieved hash rates to catch up with established players in the space.
According to the report, realized hashrate is a sign of a level playing field, a metric that has been used since the halving in 2024. According to a report in The Miner Mag, companies such as Cipher Mining, HIVE Digital, and Bitdeer have expanded their achieved hashrate after years of infrastructure improvements, bringing them closer to top established players such as MARA Holdings, Cango, and CleanSpark.
Small-scale Bitcoin miners improve realized hashrate
The Miner Mag said in its weekly newsletter that mid-sized miners have shown improvement since the 2024 halving. “Their rise highlights how rapidly middle-class public miners, once far behind, are ramping up production since the 2024 halving,” Miner Mag said. Companies such as MARA Holdings, CleanSpark, and Cango have consistently remained the largest public miners, while companies such as IREN, Cipher, and HIVE Digital have also recorded significant increases.
Hashrate is the total computational power that miners contribute to ensuring the security of the Bitcoin blockchain, while realized hashrate refers to the actual on-chain performance, i.e. the speed at which valid blocks are successfully mined. In total, the top public miners accumulated a total realized hashrate of 326 exahash per second (EH/s) in September, doubling last year's record level. These currently account for about a third of Bitcoin's total hashrate.
In the race for market share, Bitcoin mining companies are currently saddled with record levels of debt as they expand into new mining equipment, artificial intelligence infrastructure, and other capital-intensive businesses. Bitcoin miners' debt has increased to $12.7 billion in just under 12 months, according to a report from investment giant VanEck. This figure is up from $2.1 billion in the same period last year and shows the sector's momentum as it seeks to meet the demand for artificial intelligence and Bitcoin production.
Miners move to AI services to combat declining revenue
According to VanEck analyst Nathan Frankovitz, without continued investment in modern machines, miners' share of the world's hashrate will decline. “We call this movement the ice cube melting problem. Historically, miners have relied on the stock market rather than debt to cover these high capital investment costs,” said Matthew Siegel, head of digital asset research, in the October Bitcoin Chain Check report.
Meanwhile, since April's halving, when Bitcoin rewards were reduced to 3.125 BTC, more Bitcoin miners are looking to diversify their income by shifting energy capacity to AI and HPC hosting services. “In doing so, miners now have more predictable cash flow backed by multi-year contracts,” Frankowitz and Siegel said. “The relative predictability of these cash flows allows miners to take advantage of the bond market, diversifying their income from Bitcoin’s speculative and cyclical prices and lowering their overall cost of capital.”
Furthermore, as AI's prioritization of electronics is a net benefit for Bitcoin, Bitcoin miners are pivoting to AI and HPC hosting, branding themselves as not a threat to the network's hashrate. “Bitcoin mining is an easy way to quickly monetize surplus power in remote and developing energy markets, and can effectively subsidize the development of data centers designed with AI and HPC transformability in mind,” they said. At the same time, several miners interviewed by the two said they are looking for ways to monetize excess capacity when demand for AI services slows.
