Bitcoin mining margins suffered a contraction of more than 7% in September 2025. This drop adds to a 5% decline recorded in August. A report from the financial services firm Jefferies attributes the pressure to the combination of a rising hashrate and a falling BTC price.
The Jefferies analysis details how operating revenues were reduced. The theoretical daily profitability for a 1 EH/s (Exahash per second) fleet fell. It dropped from approximately $56,000 daily in August to only $52,000 in September. This decline is the direct result of two opposing forces. The total network hashrate, or computational power, increased by 9%. However, the price of the digital asset (BTC) fell by nearly 2% during the same period. Total production from publicly listed North American miners also dropped, falling from 3,576 BTC in August to 3,401 BTC in September.
This dynamic creates a margin squeeze that affects the entire industry. Hashrate measures the total competition for validating blocks. When the hashrate rises, the reward per unit of computation decreases. If the price of the reward (BTC) also drops, profitability erodes quickly. The situation is especially critical for operations with older hardware or high energy costs. Jefferies identifies the $0.05 per kilowatt-hour (USD/kWh) threshold as a critical inflection point for maintaining viability.
Will artificial intelligence become the miners’ lifeline?
The pressure on liquidity is forcing a strategic shift in the sector. Mining companies are actively seeking to diversify their income streams. Some operations are pivoting to high-performance computing (HPC) and artificial intelligence (AI). Jefferies highlights that Galaxy allocated $460 million to AI initiatives. Despite the falling margins, the stocks of publicly traded miners showed surprising performance. They rose an average of 57% through mid-September, adding $16 billion in market capitalization.
The September contraction confirms the sector’s sensitivity to market variables. Miners are forced to optimize costs and seek technological efficiency, such as with the new S21 Pro chips. The industry seems headed toward further consolidation. Farms with cheap, large-scale electricity have a clear competitive advantage. Analysts will closely watch the hashrate evolution and the response of major mining companies during the fourth quarter of 2025.
