Bitcoin (BTC) miners are discovering that “number go up” doesn’t necessarily mean benefits for them. Despite Bitcoin prices remaining high historically, mining margins have drastically narrowed, with some experts calling it the “most challenging margin environment” ever recorded. Balance sheets are contracting, companies are reducing leverage, and firms like CleanSpark are prioritizing the repayment of Bitcoin-backed credit lines.
The pressure is also felt in public markets. Bitcoin miners and related BTC investments have faced significant declines, particularly evident in the drop in shares of American Bitcoin.
However, not all sectors of the market are faltering. Investment is flowing into adjacent crypto platforms, with prediction market Kalshi recently securing $1 billion at an $11-billion valuation, following a tenfold increase in trading volumes since 2024, surpassing Polymarket.
Meanwhile, Ether is gaining popularity in derivatives markets, with CME Group reporting that Ether (ETH) futures volumes have exceeded those of Bitcoin, indicating increased options volatility and heightened trader interest.
This week’s Crypto Biz delves into the mounting challenges facing Bitcoin miners, the rise in Ethereum derivatives activity, and Kalshi’s significant funding round.
Bitcoin mining companies facing “most challenging margin environment” ever
Renewed volatility in the Bitcoin landscape has thrust mining economics into the “most difficult margin environment of all time,” according to TheMinerMag. The publication cited low mining revenues due to declining hash prices, rising operational costs, and extended equipment payback periods beyond 1,000 days as alarming indicators.
“Balance sheets are tightening” in light of these adverse conditions, the publication noted, highlighting CleanSpark’s decision to repay its Bitcoin-backed credit line with Coinbase as a strategic move to mitigate financial risk.
Bitcoin mining stocks have exhibited volatility in 2025 as the sector adjusts to the revenue shock following last year’s Bitcoin halving, which halved mining rewards. Simultaneously, many miners are shifting towards AI and high-performance computing tasks to secure more reliable, predicable income than Bitcoin mining alone can yield.
American Bitcoin stock plunges as BTC proxy trade crumbles
Shares of American Bitcoin, a mining and digital asset treasury firm linked to Eric Trump, dropped over 50% in just one trading day this week, highlighting the continued volatility affecting crypto-related equities.
The stock value halved shortly after markets opened Tuesday, extending a widespread sell-off among Bitcoin mining stocks and other so-called crypto “proxy” trades that intensified following Bitcoin’s decline from its October peak.
American Bitcoin shares are now down over 75% from their peak of $9.31 reached shortly after the company went public via a reverse merger with Gryphon Mining. This downturn reflects increasing investor hesitation towards speculative crypto stocks as Bitcoin prices and mining profitability face challenges.
Kalshi secures $1 billion as its valuation rises
Prediction market Kalshi has successfully raised $1 billion at an $11-billion valuation, indicating renewed interest in event-based trading from investors.
The Series E funding round came after Kalshi experienced its highest trading activity month to date and was spearheaded by crypto-focused venture firm Paradigm, with participation from Andreessen Horowitz, Sequoia Capital, and ARK Invest.
Kalshi’s trading volume hit $4.54 billion in November, surpassing its previous record, according to industry data. The company noted its trading activity has grown tenfold since 2024, overtaking competitors like Polymarket to become the leading prediction market by volume.
CME ignites Ether super-cycle discussion
CME Group has reported a notable increase in Ether futures trading activity, with volumes recently exceeding those of Bitcoin options. The exchange suggests this surge may indicate either a catch-up trade or the onset of a broader Ether “super-cycle.”
In a recent video, CME executive Priyanka Jain mentioned that ETH options are currently displaying greater volatility than Bitcoin options, a transition that seems to be drawing more speculative and hedging activity.
“This increased volatility has proven to be a strong attraction for traders, significantly boosting interest in CME Group’s Ether futures,” Jain stated. “Is this Ether’s long-anticipated super-cycle, or simply a catch-up trade fueled by short-term fluctuations?”
Earlier this week, CME Group introduced a new Bitcoin Volatility Index, along with several other cryptocurrency benchmarks, offering traders standardized pricing and volatility reference data.
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