Bitcoin miners encountered a challenging start to the year as mining difficulty surged to an all-time high of 110 trillion (T) in January 2025, making it harder to mine new blocks. The rise in difficulty, a 27.8% increase since the April 2024 Bitcoin halving, led to decreased production for many mining firms.
Industry Struggles as Difficulty Rises
Several major mining companies saw significant drops in Bitcoin production due to the increased computational power required to mine new blocks.
- Hut 8 mined only 65 BTC, marking a 27% decline compared to December.
- Marathon Digital (MARA) reported a 12.5% drop in production.
- Bitfarms recorded a 4.7% decrease in Bitcoin output.
The rising difficulty forced miners to invest more resources to sustain operations. Companies without cost-efficient infrastructure or advanced mining rigs faced the biggest production setbacks.
Riot Platforms Defies Industry Trend
While most mining firms struggled, Riot Platforms bucked the trend, recording a 2.1% increase in Bitcoin production. The company successfully offset the impact of rising difficulty by expanding its mining operations.
In January, Riot launched a 1-gigawatt mining facility in Texas, significantly boosting its mining capacity. The company credited its performance to newly deployed mining rigs and immersion cooling technology, which improved hash rate efficiency.
Riot CEO Jason Les highlighted the impact of their expansion:
“The Corsicana Facility reached a deployed hash rate of 15.7 EH/s towards the end of the month. We also continue to see strong results from newly deployed miners and immersion systems reflected in the significant improvement in our operational hash rate and utilization rates.”
Bitcoin Difficulty Sees First Decline in Four Months
In the final week of January, Bitcoin’s mining difficulty declined by 2.12% to 108T, marking the first decrease in nearly four months. The slight adjustment provided some relief to miners after eight consecutive increases.
Bitcoin’s hashrate, which measures the total computational power securing the network, stood at 832 exahashes per second (EH/s) in January. Cold weather across the U.S. led some mining companies to temporarily reduce operations, contributing to the difficulty drop.
Mining Firms Shift Strategies
With rising competition and increasing operational costs, some mining firms are diversifying their operations:
- Riot Platforms paused a 600-megawatt Bitcoin mining expansion in Texas, reserving capacity for potential AI/high-performance computing (HPC) hosting.
- Bitfarms agreed to sell its unfinished 200 MW Bitcoin mine in Paraguay for $85 million in cash to HIVE, reallocating funds for its 1-gigawatt U.S. expansion, which includes Bitcoin and AI/HPC infrastructure.
The Bitcoin mining industry continues to adapt to shifting network conditions, with firms investing in more efficient mining hardware and strategically adjusting operations to maintain profitability.
