Bitcoin miners are feeling the squeeze as elevated BTC prices have not translated into healthy profits. Mining margins have narrowed sharply, with industry observers calling the current period the “harshest margin environment” on record. Falling hash prices, rising operating expenses and equipment payback timelines stretching past 1,000 days are compressing revenue, prompting balance-sheet retrenchment, deleveraging and moves to pay down Bitcoin-backed credit facilities—CleanSpark’s recent repayment of its Coinbase-backed loan is a noted example.
The stress has spilled into public markets: Bitcoin miners and other crypto “proxy” equities have faced heavy selling. Notably, shares of American Bitcoin plunged more than 50% in a single session amid a wider rout in mining stocks, leaving the company down over 75% from its post-listing high. The volatility underscores growing investor caution around speculative crypto-linked firms as mining economics adjust after last year’s halving and broader market pullbacks from October highs.
Some miners are responding by diversifying into AI and high-performance computing workloads to seek steadier revenue streams beyond fluctuating Bitcoin rewards. The sector’s 2025 volatility reflects both the revenue shock from the halving and structural cost pressures that are reshaping strategies and capital allocation.
Not all crypto sectors are retreating. Prediction market Kalshi announced a $1 billion funding round that values the company at about $11 billion, following a tenfold surge in trading volume since 2024 and a record month in November with $4.54 billion in volume. The Series E was led by Paradigm and included participation from Andreessen Horowitz, Sequoia and ARK Invest, positioning Kalshi ahead of rivals such as Polymarket in market share.
Meanwhile, Ether is drawing growing attention in derivatives markets. CME Group reports Ether futures volumes have recently eclipsed those tied to Bitcoin, driven in part by higher options-implied volatility for ETH versus BTC. CME executives have suggested this could be either a catch-up trade or the start of a broader Ether “super-cycle,” as heightened volatility attracts both speculative flows and hedging activity. The exchange also launched a new Bitcoin Volatility Index and additional crypto benchmarks this week to give institutional traders standardized pricing and volatility references.
This week’s developments highlight a bifurcated crypto landscape: miners and crypto-adjacent equities navigating tightening economics and investor scrutiny, while derivatives activity and funded startups signal robust interest in other corners of the market. Crypto Biz will continue tracking the business trends shaping blockchain and digital-asset markets.
