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Bitcoin Miners’ First-Quarter Results May Disappoint Due to Falling Hashprice and Trade Tariffs

Analysts Predict Further Deterioration in the Second Quarter

According to a recent report by investment firm CoinShares, Bitcoin miners’ first-quarter 2025 results may fall short of investor expectations. The main reasons cited are the decline in hashprice—a key indicator of mining profitability—and the negative impact of trade tariffs on equipment. Analysts also warn that the situation could worsen in the second quarter, as tariffs on imported mining rigs range from 24% for equipment from Malaysia to 54% for devices from China. Despite these challenges, experts predict continued growth in Bitcoin network’s total computational power, which could reach 1 zettahash per second as early as July this year.

Double Hit: Falling Hashprice and Rising Tariffs

Hashprice, representing the daily mining revenue in dollars per petahash of computing power, continues to decline, creating significant pressure on mining companies’ margins. This metric takes into account both block rewards and transaction fees, directly affecting the profitability of mining operations.

“While preparing financial reports for the first quarter, many mining companies will face the need to explain declining returns to their investors,” note CoinShares analysts led by James Butterfill. “This is especially relevant for public companies that rely on market valuation to attract additional capital.”

The situation is exacerbated by recently introduced trade tariffs, which significantly increase the cost of upgrading equipment fleets. Miners dependent on older or less efficient rigs face higher risks due to these tariffs. When equipment efficiency becomes a critical factor in maintaining profitability, additional costs for imported devices can seriously undermine companies’ financial stability.

“Mining companies have found themselves between a rock and a hard place: on one hand, outdated equipment requires more electricity per unit of hashrate, reducing margins; on the other hand, upgrading machine fleets has become significantly more expensive due to new tariffs,” explains Anna Karpova, cryptocurrency market analyst from investment company HashCIB.

Market Segmentation: Who Will Survive in Challenging Conditions

CoinShares analysts highlight several companies that may show different results under current conditions. Core Scientific is assessed as “better insulated” as the company actively transitions to high-performance computing (HPC), diversifying its business beyond pure cryptocurrency mining.

Meanwhile, Bitdeer, which manufactures its own mining rigs, may face margin pressure on sales outside the US due to trade restrictions and competition.

“We are observing a clear market segmentation into two segments: companies with diversified businesses and access to cheap energy have chances to overcome current difficulties, while mono-businesses focused exclusively on mining with high electricity costs are under threat,” comments Michael Brown, head of the research department at Daiwa Capital Markets.

According to a recent JPMorgan report, Bitcoin miners with HPC exposure underperformed in the first two weeks of April. However, CoinShares analysts believe that in the long term, business diversification may become the key to survival in conditions of shrinking margins.

Hashrate and Hashprice Forecasts: Power Growth with Declining Returns

Despite challenging financial conditions, Bitcoin network’s total computational power continues to grow. CoinShares predicts that hashrate could reach 1 zettahash per second (ZH/s) as early as July 2025 and 2 ZH/s by early 2027. This indicates continued investment in mining infrastructure despite economic challenges.

However, the hashprice outlook is not as positive. CoinShares’ model indicates “a gradual structural decline, with prices likely to remain range-bound between $35 and $50 per PH/day through to the 2028 halving cycle.”

“This creates a paradoxical situation: hashrate is growing, indicating faith in Bitcoin’s long-term prospects, but mining profitability continues to decline,” notes Alexander Petrov, founder of mining consulting firm HashConsult. “Such dynamics typically lead to market consolidation, where only the most efficient operators can remain profitable.”

Analysts suggest that the average hash price may fall below $40 per PH/day as early as the first quarter of 2026. This expected decline reflects the ongoing efficiency gains in mining hardware and increasing competitive pressure in the mining sector.

Trade Tariffs: Short-Term Pain, Long-Term Opportunities

Interestingly, a report by investment firm Grayscale published earlier this month indicates that tariffs and trade tensions could have a positive impact on Bitcoin adoption in the medium term.

“Trade tensions often lead to volatility in traditional markets and increased interest in alternative assets, including cryptocurrencies,” explains Sarah Johnson, senior analyst at Grayscale. “Additionally, equipment restrictions may stimulate innovation and localization of production in the US and other countries, which in the long term could lead to a more sustainable and geographically diversified mining ecosystem.”

Some experts also note that high tariffs on imported equipment may stimulate the development of local mining rig production in the US and Europe, which over time will reduce dependence on Chinese manufacturers.

“We’re already seeing the first signs of growing interest in the development and production of mining equipment in the US,” comments David Wilson, CTO of American startup MiningInnovation. “While tariffs create difficulties for mining companies in the short term, in the long term, they may contribute to the development of a more sustainable and technologically advanced mining industry outside of China.”

Adaptation Strategies and Prospects for Investors

In light of the projected decline in mining companies’ results, investors are advised to carefully analyze the financial indicators and adaptation strategies of various market players.

“The key factors for sustainability in current conditions are access to cheap and stable electricity, equipment efficiency, and debt level,” believes Elena Martynova, an analyst from Morgan Stanley. “Companies with high levels of debt and dependence on expensive electricity are particularly vulnerable in the face of declining hashprice.”

Successful mining companies are already implementing various strategies to overcome current difficulties, including:

  1. Business diversification, including the development of HPC services
  2. Integration with energy companies for access to excess and cheap energy
  3. Development of proprietary solutions to improve energy efficiency
  4. Geographic diversification of operations to minimize regulatory risks
  5. Bitcoin price hedging strategies to stabilize cash flows

“Despite short-term difficulties, Bitcoin mining remains a fundamentally important part of the cryptocurrency ecosystem,” emphasizes Robert Smith, managing partner of venture fund Digital Currency Group. “Companies that can adapt to new market realities have good chances for success in the long term, especially given the continuing institutionalization of Bitcoin as an asset class.”

As we approach the publication of first-quarter financial results, investors and analysts will be closely watching how various mining companies cope with the dual pressure of declining hashprice and rising equipment tariffs. These reports may provide important indicators about the future landscape of the Bitcoin mining industry and identify leaders capable of thriving even in challenging market conditions.

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