TL;DR: Binance is shutting down its Binance Pool mining unit on November 10, a sign of how tough BTC mining economics have become. Some miners are pivoting to AI data centers, while others are chasing Zcash, which currently pays nearly three times as much per day as BTC mining. Meanwhile, Ethiopia is turning on miners, which has stalled BitFuFu’s acquisition there, and South Africa is considering discounted power for flexible high-load users.
Key Takeaways:
- Binance Pool is closing on November 10, alongside related products, including Pool Saving, Cloud Mining and Transaction Accelerator.
- Lucrative Zcash mining “similar to mining Bitcoin in 2016 and 2017” with returns of about $1,000 profit per MWh, compared with under $150 for BTC.
- Power to miners has been throttled to 23% of contracted amounts. BitFuFu’s acquisition of an 80MW Ethiopian facility has stalled amid a power-supplier dispute, which puts its deployed rigs at risk of seizure.
- South Africa’s NERSA has proposed a two-year pilot offering flexible high-load users, miners included, power at rates two-thirds below household prices.
Even Binance is having a hard time making block reward mining’s economics work, while Zcash miners are partying like its 2016 all over again.
On October 12, the Binance digital asset exchange announced the closure of its Binance Pool mining unit, as well as the affiliated Pool Saving, Cloud Mining, Transaction Accelerator and other features, effective November 10. After that date, eligible outstanding rewards, balances, refunds and settlements will be processed subject to eligibility rules, and access to pool data will continue for another 14 days before going dark for good.
Binance offered no reason behind its decision other than to say it was “part of our ongoing review of products and services.” But the economics of mining have been unforgiving for years, and Binance Pool was a relative minnow, accounting for less than 1% of mined blocks on the BTC network in recent days. That’s a significant fall from the pool’s peak 13% share in November 2022.
The average all-in cost to mine a single BTC currently stands at just under $79,000, around $4,000 below BTC’s fiat price (as of Tuesday evening). But BTC’s price briefly sank to $81,000 on Monday before rebounding, and the BTC network’s next difficulty adjustment scheduled for October 16 is currently projected to rise another 4.5% to an average 138.5 trillion hashes (guesses) required to ‘find’ a new block on the network. So these ‘good times’ may not last long.
Meanwhile, the percentage of miners’ revenue derived from transaction fees currently hovers around 0.64% of the total block reward, reflecting the BTC network’s lack of user activity. Small wonder, then, that many BTC miners are embracing the more profitable ‘pivot’ to serving as data centers for artificial intelligence (AI) operators.
On October 9, CleanSpark (NASDAQ: CLSK) issued its September BTC production report showing the company produced 529 tokens last month, down from 593 in August. But the company said it was discontinuing its monthly reports, switching instead to “standard quarterly reporting consistent with peers in the energy and data center sectors.” CleanSpark said the move reflected the progression of its “continued business evolution” from miner to “data center developer.”
CleanSpark was one of the few mining operators brave enough to report the full all-in cost of its mining operations, which in Q2 worked out to 134.3% of the revenue generated from mining.
ZEC the place to be
Some BTC miners are pivoting not to AI but to mining the Zcash (ZEC) privacy token, the profitability of which has soared in recent months. Daily profits from mining ZEC are nearly triple those to be had from mining BTC, painting a bright picture for mining hardware operator Bitmain, whose Antminer Z15 PRO is currently a hot commodity.
On October 5, Fortitude Mining Holdings, a subsidiary of Digital Currency Group (DCG), announced the signing of a $100 million non-binding purchase commitment with Bitmain giving Fortitude “a priority supply allocation” for Bitmain’s “next-generation Zcash mining equipment,” which won’t start shipping until Q2 2027.
In July, Fortitude announced a $31.5 million deal to acquire 9,000 Z15 PRO units, of which 3,000 will be shipped this month and the remaining 6,000 in November. Fortitude says it mined ~28% of all ZEC produced in the first half of 2026.
Total Zcash ‘solrate’ (hashrate) currently sits around 30.1 GSol/s, with Fortitude claiming a ~4.7 GSol/s slice of that pie. The new Bitmain rigs are expected to add ~7.56 GSol/s to Fortitude’s capacity.
Also chasing the Zcash rainbow is Cypherpunk Technologies Inc (NASDAQ: CYPH), which has ties to the Gemini (NASDAQ: GEMI) digital asset platform controlled by Cameron and Tyler Winklevoss. Cypherpunk controls roughly 18% of ZEC’s solrate and chief investment officer Will McEvoy appeared on the Bankless podcast this week to hype the “massive opportunity” available from the “extremely profitable” ZEC mining.
McEvoy noted that ZEC mining was currently returning a profit per megawatt hour of “about $1,000” versus “less than $150” for a single BTC megawatt hour. McEvoy said BTC miners who’d pivoted to AI might have thought they’d made “a good step up but it’s nowhere close to Zcash mining.”
McEvoy claimed Zcash mining’s profits were in part based on the fact that Bitmain is the only hardware manufacturer churning out ZEC-focused rigs and “they can only make so many machines a month.” Anyone placing a Z15 PRO order today is likely looking at a “seven to eight months” timeline for delivery.
Asked whether Cypherpunk was in contact with Bitmain to ensure timely delivery of new ZEC mining rigs in order to maintain its favorable position as a top ZEC miner, McEvoy said Cypherpunk hadn’t yet placed any new orders. But he acknowledged that the company needs to be “leveraging our relationships on the ground with Bitmain” to ensure “we have access to those machines.”
Bankless host David Hoffmann noted that while less than 5% of the total 21 million BTC supply is left to be produced, the figure is closer to 20% of total ZEC supply. McEvoy said the situation was “very similar to mining Bitcoin in 2016 and 2017 … the supply of machines was sort of opaque and there weren’t a ton of players.”
BitFuFu’s Ethiopian ambitions hit a wall
Access to cheap and abundant power remains the single greatest factor in whether mining BTC is profitable. Average electricity rates in the U.S. have risen 5% this year, and are up 23% since 2022, thanks in part to the AI boom. Prices will almost certainly continue to rise, given that the U.S. interconnection queue currently represents more than the country’s entire installed capacity.
Electricity production lags usage in many emerging economies, leading some of these countries to roll out the welcome mat for miners. But some of these once-hospitable nations are now having second thoughts. Ethiopia recently began throttling power delivery to miners to just 23% of their contracted amounts, part of the country’s efforts to reverse its formerly pro-mining stance.
On Tuesday, BitFuFu (NASDAQ: FUFU) announced that its planned acquisition of an Ethiopia-based mining operation “has not been consummated” in part because the unnamed company “is involved in a contractual dispute with its electric power supplier in Ethiopia.”
In October 2024, BitFuFu announced plans to acquire a majority stake in the Ethiopian company, which ran an 80MW facility. The deal, which was to be made via BitFuFu offshoot Finfront Holding Company, saw BitFuFu make cash payments of $4.1 million to the Ethiopian firm. BitFuFu also deployed 13,700 Bitmain ASIC rigs with an aggregate hashrate of ~1.57 EH/s and a current book value of $1.74 million to the Ethiopian facility.
BitFuFu says it’s still working out what’s going on, but revealed that the Ethiopian miner’s power supplier had demanded a payment of unspecified size on September 28. If this payment wasn’t made within 10 days, the supplier said it planned to “take possession” of the miner’s “collateralized equipment and assets.”
The payment apparently wasn’t made, leaving BitFuFu’s lawyers struggling to figure out the proper response. BitFuFu warned that “the final outcome of these matters remains uncertain,” but promised to update the market as warranted.
South Africa to pilot cheap electricity for miners
Other African markets may soon be picking up Ethiopia’s slack. The National Energy Regulator of South Africa (NERSA) released a consultation paper last month proposing a two-year pilot program to offer cryptocurrency miners and other “high-load and flexible customers” electricity rates two-thirds below what average households are charged.
Plans for the pilot were originally floated in March by the state-owned Eskom Holdings SOC Ltd, which proposed “a differentiated electricity-pricing structure for high-energy-use customers on a trial basis.” Basically, Eskom was looking at numbers suggesting “a significant decline in firm capacity between 2026 and 2030, alongside substantial growth in installed [photo-voltaic] capacity.”
The idea was to seek out companies flexible enough to boost their demand during periods in which surplus energy was abundant, while switching off during periods of peak energy demand. This would ensure that average households wouldn’t face power cuts while boosting Eskom’s ability to generate revenue during periods of slack demand.
Eskom says two mining operators have approached it about participating in the pilot project, “with combined initial demand of approximately 10MW and potential expansion of up to 500MW.”
NERSA has asked would-be pilot participants, stakeholders and other interested and affected parties to respond to a series of questions by October 23. NERSA expects to publicly release the results of its consultation and approval process on December 12.
A similar pilot program is currently under discussion in Senegal, as part of that country’s negotiations with the International Monetary Fund (IMF) to restructure the country’s external debt.
FAQ
Why is Binance closing its mining pool?
Binance only said the decision was “part of our ongoing review of products and services.”
What happens to Binance Pool users after November 10?
Eligible outstanding rewards, balances, refunds and settlements will be processed under eligibility rules. Pool data stays accessible for 14 more days before shutting down permanently.
Why is Zcash mining so much more profitable than BTC mining right now?
Bitmain is the only manufacturer making ZEC-focused rigs, and its output is limited, so few players can compete. Also, about 20% of ZEC’s total supply is still left to be mined, compared with under 5% for BTC.
What went wrong with BitFuFu’s Ethiopian deal?
The Ethiopian target company is in a contractual dispute with its power supplier. The supplier demanded an unspecified payment by early October and threatened to seize collateralized equipment if it wasn’t paid.
Why are electricity costs such a big deal for miners?
Power is the single biggest factor in mining profitability. U.S. electricity rates are up 5% this year and 23% since 2022, partly because of the AI boom, and they are expected to keep rising.
What is South Africa’s proposed mining power pilot?
It is a two-year NERSA pilot, first floated by Eskom, that offers discounted power to flexible high-load customers. These users would ramp up consumption during surplus periods, such as times of high solar output, and switch off during peak demand.
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