Jackson Hole, WY — Bitcoin miners have traditionally been shaped by the cyclical boom-and-bust of the four-year halving process. However, industry leaders at the SALT conference in Jackson Hole this week suggest the landscape has shifted.
The emergence of exchange-traded funds, increasing power demands, and the potential for artificial intelligence (AI) to transform infrastructure indicate that miners must diversify or risk obsolescence.
“We used to come here discussing hash rates,” stated Matt Schultz, CEO of Cleanspark. “Now our focus is on how to monetize megawatts.”
In the past, mining firms solely depended on bitcoin revenues, tethered to the four-year halving cycle. Each cycle halved the rewards, forcing miners to either reduce costs or scale operations to survive. However, according to these executives, that cycle no longer defines the model of the business.
“The four-year cycle is effectively broken as bitcoin matures into a strategic asset, with the ETF and related treasury strategies,” Schultz noted. “Adoption is driving demand. If you look at the latest ETF, they are consuming far more bitcoin than has been produced this year.”
Cleanspark, currently managing 800 megawatts of energy infrastructure and with 1.2 gigawatts under development, is now looking beyond proof-of-work. “Our quick electricity access has opened opportunities to monetize power in ways other than just bitcoin mining,” he said. “With 33 locations, we have far more flexibility than ever before.”
A brutal business
Schultz isn’t the only one recognizing the industry’s significant shift in business models.
Patrick Fleury, CFO of Terawulf, shared this view and candidly discussed the profit challenges facing miners.
“Bitcoin mining is an exceptionally tough business,” he remarked. He explained the economics of bitcoin mining: with electricity costs at five cents per kilowatt-hour, mining one bitcoin costs approximately $60,000. With bitcoin priced at $115,000, half the revenue is swallowed by electricity alone. Once corporate and operating costs are included, profit margins dwindle rapidly. Fleury believes that securing ultra-low-cost power is essential for profitability.
However, for Fleury, the core problem extends beyond energy costs — it’s the relentless growth of the network itself, driven by hardware manufacturers with little incentive to slow down.
He pointed out Bitmain, which continues to churn out mining hardware regardless of market demand due to its direct access to chipmakers like TSMC. Even without miners purchasing, the company can deploy machines in areas with extremely cheap electricity — from the U.S. to Pakistan — flooding the network with hash power and escalating mining difficulty. This global reach, combined with low production costs, allows Bitmain to remain profitable while squeezing margins for others.
Nevertheless, Terawulf is making bold moves. Last week, it entered a $6.7 billion lease-backed partnership with Google to repurpose extensive mining infrastructure for data center space.
“Infrastructure like this, as everyone here knows, doesn’t change quickly,” Fleury said. “Tech typically evolves rapidly and disruptively, but these agreements require extensive time to finalize. It took us four to five months of rigorous due diligence.”
“What I’m most proud of in this transaction is collaborating with our partners to create a model that I hope other companies in the industry can replicate,” he added. “Google is providing $3.2 billion in lease support to Terawulf, facilitating my ability to secure financing at favorable capital costs.”
Profitability—or Patience
Kent Draper, chief commercial officer at IREN, offered a more reserved yet assured perspective. His company is still mining bitcoin profitably — even today, he claimed. Yet, he pointed out that power remains a central factor.
“Being a low-cost producer is crucial, which has always been our focus — controlling our sites and ensuring operational efficiency in regions with low-cost electricity,” Draper stated.
IREN is reportedly operating at 50 exahash, translating to a billion-dollar annual revenue rate under current bitcoin market conditions. He mentioned that the company’s gross margins — total revenue minus electricity costs — stand at 75%. Even after accounting for corporate overhead and SG&A expenses, IREN maintains a 65% EBITDA margin, equating to approximately $650 million in annualized earnings.
Still, even IREN is slowing its mining expansion. “That’s primarily dictated by the opportunities we see within AI today, as we look to diversify revenue streams, rather than an inherent view that bitcoin mining is losing its appeal,” Draper explained.
On the AI front, IREN pursues both co-location and cloud initiatives. “The capital intensity is markedly different,” Draper noted. “If you own the GPUs on top of the data center infrastructure, that requires three times the investment. Meanwhile, on the cloud side, payback periods typically shorten, often down to around two years for GPU investments alone.”
Holding bitcoin — and the Line
For Marathon Digital (MARA) CFO Salman Khan, adapting swiftly is key to survival. Drawing from his experience in the oil sector, Khan recognizes a familiar cycle: boom, bust, consolidation, and the ongoing push for efficiency.
“This mirrors trends in commodity-driven cyclical industries,” Khan remarked. “Some affluent families in oil became billionaires, while others have gone bankrupt. A solid balance sheet is essential to weather these cycles.”
Marathon retains bitcoin on its balance sheet — a strategy Khan believes has been beneficial. “We aren’t a treasury firm, but we appreciate having that hedge in case bitcoin prices surge.”
Recently, Marathon announced acquiring a majority stake in Exaion. “Our focus regarding AI is on local computing,” Khan explained. “We value sovereign computing, which helps individuals manage their data more effectively at closer proximities. We also appreciate the recurring revenue possibilities that arise, along with the software and platform components.”
Beyond bitcoin, behind the grid
Regardless of differing views and strategies, a common thread persists: the importance of power. Whether it’s for bitcoin mining, powering AI, or stabilizing electrical grids, energy — not hash rates — dominated discussions.
“We limit our energy usage to 120 hours per year,” CleanSpark’s Schultz stated. “This allows us to save about a third of our overall energy expenses. Therefore, flexibility is essential.”
Cleanspark, he added, spent the past year strategically securing megawatts nationwide. “You mentioned Georgia,” Schultz said. “We have 100 megawatts around the Atlanta airport, a prime illustration. Our aim has been to be the valued partner for some rural utilities to make use of stranded megawatts.”
Still about bitcoin — for now
Despite the increasing emphasis on AI, the panelists reaffirmed that bitcoin is still central to their operations — for the time being. When asked why mining companies merit investor interest, their responses emphasized scale, cost efficiency, and resilience against volatility.
Fleury noted that Terawulf’s contracted power capacity could yield significant cash flow, likening the economics to established data center providers. Khan highlighted a gap between Marathon’s bitcoin assets and its market valuation, suggesting that the core mining business is overlooked. Draper emphasized IREN’s operational efficiency and low-cost structure, referencing recent performance metrics that positioned the company ahead of other public miners.
While the future may incorporate cloud infrastructure and edge computing, Schultz contended that bitcoin itself could evolve into a more substantial element — a foundational component in energy systems. As he expressed, the next stage may shift from speculation to bitcoin’s role in optimizing power networks.
Read more: Bitcoin Mining Costs Soar as Hashrate Hits Records: TheMinerMag
