Bitcoin miners are caught within the tightest squeeze of the community’s historical past, and a brand new Wintermute report argues that merely ready for the following bull run is not a technique.
As a substitute, the agency says miners must reinvent themselves as infrastructure and treasury managers in the event that they need to make it to the following halving.
Wintermute analyst Jasper De Maere says the present mining cycle is structurally completely different from prior ones in 2018 and 2022. Bitcoin’s design cuts block rewards in half each 4 years, however this time the worth has not doubled over the identical window, which suggests miner income is shrinking in actual phrases.
On a rolling 4‑yr foundation, Bitcoin has solely returned about 1.15x on this epoch, far beneath the 10x–20x multiples seen in earlier cycles.
In previous cycles, big value features coated up plenty of issues. Miners might rely on bull markets to bail out weak margins after every halving.
Right this moment, with establishments, ETFs, and company treasuries within the combine, Bitcoin trades extra like a mainstream macro asset, and people explosive 20x runs are much less possible.
For miners that constructed their enterprise on the belief of everlasting hypergrowth, Wintermute frames this as a regime change, not a foul quarter.
Margins are getting crushed
Underneath the hood, Bitcoin mining has a quite simple value construction: vitality and compute. That simplicity means there will not be some ways to guard income when income falls. Wintermute’s evaluation reveals gross margins on this epoch peaked round 30%, a stage that marked the underside throughout prior bear markets, not the highest.
Earlier epochs noticed lengthy stretches the place miners loved 70–80% margins; now, the “good instances” look extra like prior stress factors.
Transaction charges will not be saving the day both. Price spikes tied to hype cycles and mempool congestion present up on charts, however they fade quick and barely contribute various % of complete miner income over time.
Wintermute notes that even if you embrace charges, the margin strains for every cycle barely transfer aside, particularly within the present epoch. In different phrases, the protocol’s constructed‑in “second income stream” will not be performing as a dependable backstop.
The AI pivot is a chance for a couple of
One path out of the squeeze is getting loads of consideration: pivoting into excessive‑efficiency computing (HPC) and AI workloads. Large tech companies and AI startups are racing to lock in energy and information middle capability, and they don’t need to wait 5 to 10 years for brand spanking new grid connections and building.
Miners, who already management low-cost energy and constructed‑out websites, are a pure shortcut.
Wintermute factors out that websites as soon as valued at roughly 1–7 {dollars} per watt as pure mining operations have modified arms at near 18 {dollars} per watt after being repositioned for AI compute, helped by offers like HUT’s work with Google and Anthropic.
Public‑market buyers have rewarded miners that announce credible AI plans with greater valuations and cheaper capital by way of fairness and convertible debt.
The catch is that not each miner has the placement high quality, steadiness sheet, or operational capability to show into an information‑middle enterprise.
Placing “idle” Bitcoin to work
That’s the place Wintermute sees a second, underused lever: lively steadiness sheet administration. Miners collectively maintain near 1% of all Bitcoin, a legacy of the “HODL” playbook that dominated earlier cycles.
On the similar time, many listed miners have been promoting down components of their treasuries to cowl tighter margins and debt, with some even wiping out holdings altogether.
As a substitute of letting reserves sit idle till they’re dumped in a liquidity crunch, Wintermute argues miners ought to deal with BTC like a working asset. On the “lively” aspect, which means utilizing derivatives methods comparable to coated calls and money‑secured places to earn yield on holdings, at the price of taking some market threat.
On the “passive” aspect, miners can deploy cash into on‑chain lending markets, together with a brand new wrapped‑BTC market on Wildcat that Wintermute has highlighted, to generate curiosity earnings.
Wintermute’s backside line is that Bitcoin’s design is working, however the simple period for miners is over. Problem can nonetheless regulate, but it can’t overcome slower value development, a charge market that has not scaled, and rising vitality prices that eat into each block reward.
The AI pivot will possible reshape the higher tier of the business, turning some miners into full‑blown infrastructure firms.
