Increased transaction activity on the Bitcoin network is crucial for sustaining miner incentives as block rewards continue to decrease.

Well-capitalized miners have managed to adapt to declining cryptocurrency prices, achieving all-time high hashrate levels in January 2025.

To navigate these challenges, miners are diversifying their operations; some are relocating to regions with cheaper energy, such as Africa and Latin America, while others, like Core Scientific, are entering the AI data center hosting market.

This revenue growth follows the Bitcoin network's halving in April 2024, which halved mining rewards from 6.25 BTC to 3.125 BTC per block.

Nearly a year after the halving, miners have adjusted to the new block rewards and operational challenges, demonstrating resilience in the face of adversity.

Bitcoin's supply velocity has declined, indicating that BTC is increasingly being held as a store of value rather than actively transacted.

Currently, only 1.33% of mining revenues are derived from transaction fees, which is insufficient to offset the decline in block rewards, highlighting the need for increased on-chain activity.

Despite stabilizing revenues, Bitcoin miners face underlying pressures that threaten their profitability, including obsolete mining equipment and decreasing transaction fees.

Recent customs restrictions have resulted in delivery delays for American miners, adding to operational uncertainty and rising costs.

As the future of Bitcoin evolves as both a store of value and a medium of exchange, the entire mining ecosystem is impacted, especially with rising network difficulty expected in April 2025.

Bitcoin mining revenues surged to $3.7 billion in the fourth quarter of 2024, marking a 42% increase from the previous quarter, and are projected to stabilize around $3.6 billion in the first quarter of 2025, according to Coin Metrics.

Bitmain's dominance, controlling between 59% and 76% of the global hashrate, raises concerns about the concentration of ASIC machine supply and the potential impact of US-China trade relations.