Network Overview

With mining profitability taking a hit the last few weeks, the Bitcoin network experienced a small contraction, with hashrate going back to the level of a couple of months ago. Meanwhile Bitcoin price continues to contract, eroding mining margins further. Mempool size shows a return to the levels that were typical in the summer, but for the moment transaction fees remain contained. With mining revenue falling every week, energy efficiency and low electricity costs become imperative in order to continue mining at a profit.

Bitcoin Miners Eye AI and Chip Sales as Q4 Earnings Approach

As Bitcoin miners prepare to release their Q4 earnings, investors are shifting their focus toward non-core business lines such as AI computing and ASIC chip sales. With the halving event in April 2024 cutting block rewards to 3.125 BTC, mining margins were reduced, making alternative revenue streams more critical. Major Bitcoin mining companies, including Riot Platforms (RIOT), Bitdeer (BTDR), Marathon Digital (MARA), and Core Scientific (CORZ), will report their earnings between Feb. 24 and 26.

Analysts at H.C. Wainwright & Co have shown optimism, particularly about Bitdeer, thanks to the strong demand for its first internally developed ASIC chips. Riot, which has scaled back its BTC mining expansion to evaluate AI and high-performance computing (HPC) opportunities, is also rated a “Buy” with a $17 target. Other firms, like Marathon and Bitdeer, are investing heavily in power plants and data centers to reduce costs and increase efficiency.

Source: Cointelegraph

FPPS Mining Payouts: A Stability Illusion or a Fading Model?

Bitcoin mining pools have adopted the Full Pay Per Share (FPPS) payout model to offer miners predictable earnings by removing variance caused by pool luck and transaction fee fluctuations. By acting as an insurance mechanism, FPPS ensures that miners receive a stable payout based on their contributed hashrate, regardless of how many blocks the pool finds or how lucrative transaction fees become. However, this system comes with a cost—higher pool fees that miners ultimately pay for the assurance of stability.

Despite its widespread adoption, the long-term sustainability of FPPS is increasingly being questioned. With transaction fees accounting for a growing share of mining rewards post-halving, the variance in block rewards is expected to rise, making FPPS pools more costly to operate. As insurance costs grow, pool fees could become prohibitively high, pushing miners to reconsider the PPLNS (Pay Per Last N Shares) model, which rewards them directly based on found blocks. While PPLNS exposes miners to revenue fluctuations, it allows them to capture full transaction fee spikes—something FPPS does not.

Source: Bitcoin Magazine

Bitcoin Hashrate Declines Amid Market Challenges

After reaching an all-time high of 850 EH/s on February 8, Bitcoin’s hashrate has gradually declined, hovering around 816 EH/s in recent days. While this drop may raise concerns, it is still within the range seen in early January, suggesting a natural fluctuation rather than a sharp downturn. However, for miners, the situation remains challenging due to rising difficulty levels and declining profitability. With mining rewards at historically low levels per TH/s, less efficient miners are finding it harder to cover operating costs, leading to the shutdown of older hardware.

The key pressure point remains electricity costs, which vary significantly across regions. Miners with access to cheap energy can sustain operations despite the high difficulty, while those with higher expenses are being forced to scale back. Market analysts anticipate a potential adjustment in mining difficulty in the coming weeks, which may provide some relief. However, with energy consumption near historical highs and competition for block rewards intensifying, only the most efficient miners are expected to thrive in the current climate.

Source: Cryptonomist

Bitcoin Mining Expands in Russia Despite Regulatory Challenges

The Bitcoin mining sector in Russia saw significant growth in 2024, with the number of mining farms rising by 7% to 136,600, according to data from MTS EnergyTool. Total mining capacity in the country exceeded 11 GW as of January 2025, with Moscow and its surrounding region accounting for a combined 17% of all farms. Irkutsk remains Russia’s leading mining hub, attracting operations due to its low-cost hydroelectric power.

However, despite this expansion, only 3 GW of the available 11 GW is reportedly used by legal miners. The Russian government has been working to regulate the industry, with President Putin signing laws in August 2024 to legalize Bitcoin mining under specific electricity usage limits. Nevertheless, illegal mining remains a major problem, as unauthorized operations are costing the state-owned energy provider Rosseti over 1.3 billion rubles in 2024 alone.

Source: Crypto News

Texas Senate Considers State Bitcoin Reserve Amid Economic Uncertainty

Riot Platforms’ VP of Research, Pierre Rochard, testified before the Texas Senate Committee on Business and Commerce in support of Senate Bill 21, which would establish a state Bitcoin reserve. Speaking on Feb. 18, Rochard emphasized Bitcoin’s key attributes that make it an ideal financial hedge. The bill, which eliminates a previous $500 million annual cap on Bitcoin acquisitions, would allow Texas to diversify its assets and maintain financial resilience amid potential federal fiscal pressures.

The Texas Comptroller’s Office would oversee the reserve, using cold storage and regular audits to ensure security and transparency. Supporters, including Lieutenant Governor Dan Patrick, argue that such a reserve would not only strengthen the state’s balance sheet but also stimulate local economies, particularly in areas like Milam County, home to Riot’s Rockdale facility. If passed, Texas would join other states exploring cryptocurrency integration into public finance strategies. A committee vote on the measure is expected in March 2025.

Source: CryptoSlate

MARA Holdings Expands Bitcoin Mining with Texas Wind Farm Acquisition

MARA Holdings has completed the acquisition of a Texas wind farm, adding 114 megawatts of wind power capacity and 240 megawatts of interconnection capacity to its energy infrastructure. The company plans to integrate the wind farm into its Bitcoin mining operations, utilizing last-generation ASIC mining hardware that would have otherwise been decommissioned or sold. By using renewable energy, MARA aims to lower mining production costs while maximizing efficiency.

With this acquisition, MARA now owns and operates 136 megawatts of generating capacity, strengthening its position as the second-largest publicly traded corporate Bitcoin holder, with 45,659 BTC on its balance sheet. The move aligns with a broader industry trend of Bitcoin miners securing energy assets to optimize operations and mitigate costs amid increasing network difficulty and regulatory scrutiny.

Source: CoinDesk

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