Galaxy Digital analyst outlines the outlook for overly centralized mining operations., 2026/04/13 13:41:47

Bitcoin mining is becoming increasingly centralized, with computational power concentrated among a few major players, rendering the extraction of the first cryptocurrency nearly unattainable for the vast majority of interested parties, stated Alex Thorn, head of research at Galaxy Digital.

According to the expert, several mining firms in the United States have production costs exceeding $100,000 to $150,000 per Bitcoin. The primary factors contributing to this are high electricity prices and equipment wear. Under these circumstances, smaller participants are exiting the market, further intensifying the centralization of the network.

Geographically, Bitcoin mining shows signs of decentralization: hash rate is gradually shifting to countries in the so-called Global South—such as Paraguay and Ethiopia—where there is access to inexpensive surplus hydroelectric power. Thorn believes that this decentralization of mining power across different continents enhances the network’s security, making it less reliant on the situation in any single country.

In the coming years, the industry is expected to continue moving towards consolidation—only those companies that can secure access to cheap energy and effectively manage costs will survive, according to the head of research at Galaxy Digital. The complete disappearance of competition is not anticipated by the analyst; rather, he asserts that the competition will shift to the level of infrastructure, electricity contracts, and technological solutions, bypassing the phase where “whoever has more connected equipment wins.”

Previously, Alex Thorn stated that banks are “holding back the adoption” of Bitcoin and other major cryptocurrencies as they seek to buy time to develop their own solutions.