Tough Q1 2025 For Crypto Miners Despite Bitcoin’s Spectacular Rally

US cryptocurrency miners are reportedly facing financial difficulties in the first quarter of 2025, despite Bitcoin's spectacular rise to almost $109,000 in January this year. Though the price of Bitcoin remains robust, rising mining difficulty, rising energy costs and increased competition are all reducing profitability for many mining operations.

Based on a compilation of analyst projections, seven of the eight biggest publicly-traded Bitcoin miners in the US are predicted to report losses for the first quarter of 2025, according to a report by Bloomberg.

Collectively, these companies are forecasted to swing from a combined adjusted net income of $1.1 billion in Q1 2024 to a loss of around $190 million this year.

While the broader crypto market has been buoyant, the business of mining has become more complex. Mining difficulty, which indicates the level of effort required to mine new Bitcoin, has reached all-time highs in recent months. In addition, rising electricity prices in key mining hubs have further strained profit margins.

Brian Dobson, managing director of disruptive technology equity research at Clear Street, told Bloomberg that the current quarter is expected to be particularly challenging for Bitcoin miners. He pointed out that increasing global mining difficulty is likely to lead to margin compression and reduced revenues across the industry.

Incidentally the sector’s financial squeeze comes just months after US President Donald Trump expressed support for domestic Bitcoin mining during his Presidential campaign. Riot Platforms Inc., one of the largest US mining companies by revenue, is expected to report both a revenue decline and a quarterly loss. According to the report, CleanSpark Inc. will likely be the only miner to generate a profit for this quarter of 2025.

Even as institutional interest in cryptocurrency continues to grow, the infrastructure that supports it, particularly mining, is facing increasing operational and financial challenges. According to the Bloomberg report, in view of the growing disparity between the market performance of Bitcoin and the difficulties, miners are now focusing on the long-term viability in the face of growing competition and rising costs.