Bitcoin Mining Sales on the Rise Among Small-Scale Operators, According to Coin Metrics
In the first quarter of 2025, the pattern of bitcoin inflows to exchanges exhibited stability among large-scale miners, while small mining firms exhibited an increased sell-off pace, according to a Coin Metrics report.
The crypto industry is currently undergoing an adaptive phase post-halving, as per analysts, with miners coping with lower block rewards, narrow profit margins, and transforming operational dynamics. This insight comes from the latest edition of the "State of the Network" report by Coin Metrics, penned by Tanay Ved.
Despite the stabilization in miner revenues, reaching an estimated $3.6 billion in Q1, transaction fees only accounted for a marginal 1.33% of this total. A potential concern arising from this is the need for a larger transaction volume and intensified competition for block space to nurture sustainable fee revenue, emphasized the analysts.
Among the notable trends observed were:
- Global hash rate predominantly stemming from Chinese manufacturer Bitmain's devices, amounting to approximately 76 percent. This raises supply chain risks due to escalating geopolitical tensions.
- A marked increase in low-value transaction activity; transactions beneath $100 now comprise around 60 percent of total bitcoin transfers.
- A surge in popularity for Layer 2 solutions such as Lightning Network, Stacks, and Botanix, enhancing scalability, discovering new use cases and fortifying the foundations for a vigorous fee market.
Bernstein analysts earlier downgraded their 2025 outlook on bitcoin mining stocks. However, the firm anticipates a new bull market phase, with U.S. President Donald Trump's administration initiatives playing a significant catalyst role.
[1] Improvements in hardware technology and AI computing integration are driving the shift towards more efficient mining operations.[2] Larger miners benefit from economies of scale, subsidized power, and superior hardware, while home miners face higher costs and increased difficulty.[3] Public miners are intensifying their hashrate growth, with CleanSpark and IREN in the forefront, while there is a trend away from "hodl" strategies, leading to more sell-offs.[4] Regulatory environment is becoming more supportive, with U.S. and EU initiatives providing clearer guidelines for investors.[5] Innovative solutions like advanced hardware deals are emerging, allowing miners to maintain Bitcoin exposure while navigating waning economics.
- The aerospace industry might find an unexpected alliance in the Bitcoin finance sector, as advancements in AI computing and hardware technology could potentially facilitate more efficient Bitcoin mining operations, aiding in the development of innovative solutions.
- The decentralized Bitcoin industry, currently undergoing a post-halving adaptive phase, may intersect with the traditional finance sector, as larger miners, benefiting from economies of scale, subsidized power, and superior hardware, could attract investors from the aerospace sector seeking to diversify their portfolios.
