The crypto industry is entering 2025 with significant developments and evolving trends. According to a study by The Block Research, 2024 witnessed transformative changes that provide critical insights into where the market is headed this year.
Bitcoin Mining: The Post-Halving Reality
Bitcoin’s fourth halving in April 2024 marked a pivotal event for the world’s largest cryptocurrency. This halving reduced block rewards from 6.25 bitcoins to 3.125 bitcoins, significantly impacting miner revenues. As The Block Research highlights, “monthly revenues from subsidy rewards plummeted from $1.49 billion to $882 million.” This drastic cut underscored the financial strain on miners.
However, the report also revealed a surprising twist: “Despite the revenue drop per block, Bitcoin miners generated $13.3 billion in 2024, surpassing 2023’s $10.5 billion.” The rise in bitcoin price, which soared to over $100,000 by late 2024, alongside increased on-chain activities like Ordinals and BRC-20 tokens, bolstered miners’ overall income. But these fees, which peaked at 16% of monthly revenue, later dwindled to just 3%, reinforcing the miners’ reliance on block subsidies.
Bitcoin hash rate surged by 43% in 2024, reaching 727 exahashes per second. While this growth reflects the network’s robustness, it also intensified competition among miners. According to the report, “miners now earn just $0.046 per TH/s daily, down nearly 51% from $0.095 at the year’s start.” This reduced profitability has pushed miners to join large pools, with Foundry USA, Antpool, and ViaBTC dominating the hash rate, contributing 29.5%, 22.95%, and 13.3%, respectively.
This concentration has raised concerns about centralization risks. The Block Research highlights emerging solutions like Braiins’ Stratum protocol and Ocean’s DATUM protocol, which aim to decentralize block-building power and reduce the potential for transaction censorship.
Read Also: What is next for bitcoin after the $100,000 mark?
Public Bitcoin Miners: Performance and Challenges
The study notes that publicly traded bitcoin miners underperformed compared to bitcoin itself in 2024. While bitcoin saw a 100% return, the average return for mining firms was 70%, with a median of just 30%. Exceptions like Core Scientific and TeraWulf achieved remarkable gains of 420% and 243%, respectively.
Also, publicly traded miners contributed 22.69% of the total bitcoin mined in 2024, equating to 42,154 BTC. Notably, Marathon Digital leads with 27,562 BTC in treasury holdings. The report also highlighted an active year for mergers and acquisitions, with Northern Data’s $435 million acquisition of Damoon and Bitfarms’ $140 million deal for Stronghold Digital.
Read also: Bitcoin Blockchain Ecosystem: Top 5 BRC-20 Tokens You Should Know
Transitioning to a Fee-Based Model
The impending decline of subsidy rewards, as bitcoin issuance approaches its cap, has reignited the debate on transitioning to a sustainable fee-based model. On-chain activities like Ordinals, which accounted for over 20% of mining revenue in late 2023, hint at the potential for a robust fee market. However, as The Block Research notes, “On-chain trading activities have slowed, emphasizing the need for innovation to reignite demand for block space.”
Upcoming technologies like OP_CAT could play a transformative role. This proposal seeks to enhance Bitcoin’s smart contract capabilities, enabling advanced features like smart contract vaults and Layer 2 networks. According to the report, these developments “may ultimately retrigger demand for Bitcoin block space, driving fee revenue growth and reducing miners’ dependency on subsidies.”
Read Also: Bitcoin eyes $2T inflow amid $20T global money supply growth in 2025
Broader Implications for the Crypto Market
The broader crypto market’s performance continues to evolve alongside Bitcoin’s developments. As miners and developers innovate to address challenges, the industry must also address regulatory scrutiny, energy concerns, and centralization risks. The Block Research emphasizes that “decentralizing mining pools and leveraging new protocols could enhance Bitcoin’s resilience and maintain its dominance.”
However, crypto asset buyers must adapt by closely monitoring innovations like OP CAT, which promises to unlock new use cases for Bitcoin, and by anticipating the impact of declining block subsidies on mining economics. Investors should consider the rising role of miners transitioning to large pools, the potential risks of centralization, and the opportunities presented by fee-based revenue streams. Proactive strategies, such as diversifying portfolios into emerging blockchain technologies and supporting decentralization-focused protocols, will be critical to navigating this transformative phase in the crypto market.
Read more: Bitcoin may hit $200,000 in 2025—Bitwise
Image credit: AI-generated @ Freepik
Victor Solomon is a crypto analyst at Crypto Asset Buyer (CAB). Over the years, Victor has gained valuable expertise in market analysis, risk management, and community management within the cryptocurrency ecosystem. The founder of Soluvic Crypto Hub, a crypto community where he equips newbies in the space, Victor’s mission is to empower individuals to uncover opportunities and safely navigate risks in the blockchain industry. Victor’s academic foundation includes a BSc. (Ed) in Mathematics, a credential that underpins his strong analytical and problem-solving abilities. Currently, he is expanding his technical expertise as a Software Development student at Brigham Young University. He is an Ex African Manager of Newscrypto..
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