Jackson Hole, Wy. — Bitcoin miners have long been characterized by the boom-and-bust rhythm of the four-year halving cycle. However, the landscape has now shifted, according to some of the industry’s leading executives at the SALT conference in Jackson Hole earlier this week.
The emergence of exchange-traded funds, climbing demand for power, and the potential of artificial intelligence reshaping infrastructure needs means miners must diversify or risk being left behind.
“We used to come here and talk about hash rate,” said Matt Schultz, CEO of Cleanspark. “Now we’re contemplating how to monetize megawatts.”
For years, mining companies that relied solely on bitcoin mining for revenue lived and died by the four-year bitcoin halving cycle. Each cycle halved the rewards, forcing miners to cut costs or scale up to survive. However, executives now believe this rhythm 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 treasury among other factors,” Schultz stated. “The adoption is driving demand. If you examine the most recent ETF, they’ve consumed infinitely more bitcoin than has been generated this year.”
Cleanspark, which operates 800 megawatts of energy infrastructure and has another 1.2 gigawatts in development, is shifting its focus beyond proof-of-work. “Our speed to market with electricity has created opportunities to monetize power beyond just bitcoin mining,” he mentioned. “With 33 locations, we possess far more flexibility than ever before.”
A Brutal Business
Schultz is not alone in recognizing the industry’s monumental shift in business model.
Patrick Fleury, CFO of Terawulf, echoed the sentiment, candidly discussing the profit squeeze miners face.
“Bitcoin mining is an incredibly challenging business,” he said, outlining the economics clearly: with electricity at five cents per kilowatt hour, it currently costs roughly $60,000 to mine a single bitcoin. At a bitcoin price of $115,000, half the revenue is consumed by power alone. After accounting for corporate expenses and other operating costs, margins tighten swiftly. In his view, mining profitability hinges heavily on securing ultra-low-cost power.
For Fleury, the deeper issue isn’t merely power costs — it’s the relentless expansion of the network itself, driven by hardware manufacturers with little incentive to slow down.
He highlighted Bitmain, which continues to produce mining rigs regardless of market demand, thanks to its direct pipeline to chipmakers. Even when miners aren’t buying, the company can deploy the machines in regions with ultra-cheap electricity, flooding the network with hash power and increasing mining difficulty. This global footprint, combined with low production costs, enables Bitmain to remain profitable while squeezing margins for others.
Nonetheless, Terawulf is pivoting aggressively, recently signing a $6.7 billion lease-backed deal with a tech giant to convert hundreds of megawatts of mining infrastructure into data center space.
“As everyone here can attest, infrastructure like electrical does not move quickly,” Fleury remarked. “Tech tends to move fast, but these deals take an extensive time to finalize. It required several months of thorough due diligence.”
“I take great pride in that transaction for collaboratively working with partners to develop a new approach that I hope the industry can replicate,” he noted. “Support from major tech players allows us to secure financing at an efficient cost of capital.”
Profitability—or Patience
Kent Draper, chief commercial officer at IREN, adopted a quieter yet confident approach. His company mines bitcoin profitably — even today. However, he emphasized one critical aspect: power.
“Being a low-cost producer is essential, and that’s how we’ve structured our business — maintaining control of our sites and being located in areas with low-cost power,” Draper commented.
According to him, IREN operates at 50 exahash, translating to a billion-dollar annual revenue run rate under current bitcoin market conditions. He noted that the company’s gross margins stand at 75%, and after accounting for corporate overhead and expenses, IREN maintains a 65% EBITDA margin, resulting in around $650 million in annualized earnings.
Despite this, even IREN is pausing its mining expansion. “This decision is primarily influenced by the opportunities we see in the AI sector today and the potential to diversify revenue streams, rather than any fundamental belief that bitcoin mining is no longer attractive,” Draper explained.
On the AI side, IREN is pursuing both co-location and cloud strategies. “Capital intensity differs significantly,” Draper stated. “If you own the GPUs in addition to the data center infrastructure, that requires three times the investment. Cloud-side payback periods tend to be faster—usually around two years for GPU investment alone.”
Holding Bitcoin — and the Line
For Marathon Digital CFO Salman Khan, survival hinges on agility. Drawing parallels from his oil industry background, Khan observes a familiar pattern: boom, bust, consolidation, and an ongoing race for efficiency.
“This mirrors trends in commodity-exposed cyclic industries,” Khan said. “While some wealthy families in oil made billions, others have faced bankruptcies. A strong balance sheet is crucial to weather these cycles.”
Marathon retains bitcoin on its balance sheet — a strategy Khan claims has proven advantageous. “We’re not a treasury company, but we find value in that hedge if bitcoin prices rise.”
Recently, Marathon announced a major stake in an AI-focused company. “Our focus in the AI arena is on edge computing,” Khan noted. “We favor sovereign compute, which enhances data control nearer to users. We appreciate the recurring revenue potential here, along with the software and platform aspects.”
Beyond Bitcoin, Behind the Grid
Despite differing perspectives and strategies, a common factor remains: power. Whether used for bitcoin mining, AI, or balancing electrical grids, energy — not hash rate — dominated the dialogue.
“We reduce our energy consumption for 120 hours a year,” CleanSpark’s Schultz stated. “This flexibility significantly lowers our energy costs.”
He added that Cleanspark has spent the past year securing megawatts across the country. “We have 100 megawatts surrounding a major urban area. We’ve focused on becoming a valuable partner for rural utilities to monetize stranded megawatts.”
Still About Bitcoin — for Now
Despite the increasing emphasis on AI, the panelists clarified that bitcoin remains central to their operations — for the time being. When asked why mining companies still merit investor attention, responses highlighted scale, cost efficiency, and the capacity to endure volatility.
Fleury pointed out that Terawulf’s power capacity could yield significant cash flow, likening the economics to established data center operators. Khan indicated a disconnect between Marathon’s bitcoin holdings and its market valuation, suggesting that the core mining business is overlooked. Draper emphasized IREN’s efficiency and low-cost structure, citing metrics that place the company ahead of other public miners.
While the horizon may include cloud infrastructure and edge computing, Schultz argued that bitcoin may still evolve into a foundational layer for energy systems. He suggested that the next phase could be less about speculation and more about bitcoin’s role in balancing power networks.
Read more: Bitcoin Mining Costs Soar as Hashrate Hits Records: RialCenter
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