Frequent Industry Swings: How Crypto Mining Firms Handle Challenges

The crypto mining industry in 2025 seems like a whole new world compared to before.

In 2021, mainland China completely banned crypto mining activities, forcing a massive migration of mining machines and suddenly reshaping the global hash power landscape;

In 2022, Ethereum completed its shift from Proof of Work to Proof of Stake, marking the end of traditional mining for one of the biggest public chains;

In 2024, Bitcoin went through its halving, tightening mining profitability and squeezing profit margins compared to the previous year.

Under the multiple impacts of policy, technology, and market forces, crypto mining companies have had to speed up their transformations and seek new paths for survival and growth. To do this, crypto mining firms have tried various things externally: upgrading ASIC hardware to chase higher hash power efficiency; rebranding and expanding their business to shift their identity from "miners" to "digital infrastructure providers," tapping into AI and high-performance computing markets; going public on capital markets and issuing hash power derivatives to boost financing capabilities and stabilize earnings; and signing long-term power purchase agreements (PPA), introducing cooling and operations optimization tech to handle energy pressures, and so on. At the same time, mining pools are constantly innovating in hash power allocation mechanisms, settlement transparency, and derivative services to solidify their user base and tackle increasingly fierce competition.

These transformations have definitely helped cushion the blows from external risks, but they can't change one fact: the external environment is always full of uncertainty – policies can change overnight, energy prices and coin prices can fluctuate at any time. At this point, maybe it's worth shifting some focus from the outside to the inside, trying to tap into the company's internal growth potential. In particular, by optimizing internal financial and accounting management capabilities, strengthening compliance and transparency, mining companies and pools can build their own moat in the fierce external battles, stabilizing current operations and laying a solid foundation for earning long-term trust in the capital markets.

Overview of Pain Points in Financial and Accounting Management for Mining Firms and Pools

In reality, most crypto mining companies and pools face several tricky issues in their internal financial and accounting management, such as:

Profit Calculation Distortions: Hash power outputs are spread across multiple pools and accounts, but costs like electricity, depreciation, site maintenance are scattered among different entities, making it hard to match them item by item. The result is that surface profits look like they're growing, but actual gross margins and net margins are blurry, leaving business decisions without a solid basis.

Fragmented Cross-Border Finances: As hash power migrates to North America, Central Asia, the Middle East, and other places, accounting standards vary across jurisdictions, with ledgers scattered among different subsidiaries. Consolidating reports is time-consuming and labor-intensive, and it's easy to have inconsistent calibrations. When facing external financing or regulatory audits, management struggles to deliver a unified and credible financial report.

Disconnect Between Business and Finance: In mining pool scenarios, the operations system handles recording hash power allocation and user settlements, but the finance system often relies on manual imports or Excel processing. Data delays and information asymmetries lead to frequent mismatches between on-chain actual earnings and financial ledger numbers, not only affecting internal management but also damaging external trust.

Compliance and Audit Pressures: As tax compliance gets stricter, companies need to provide complete, traceable chains of transaction evidence. But in reality, crypto mining firms often lack audit-friendly accounting systems and can't quickly prove asset ownership and cost bases. When facing regulators or capital markets, the company's reputation and financing capabilities could be challenged at any moment.

Disconnect Between Management and Strategy: Crypto mining companies easily focus their attention on expanding hash power and negotiating energy deals, while internal value management is seen as "back-office stuff." This leaves finance teams constantly scrambling with reconciliations and reports, unable to build up strategic support, and even less able to help the company establish long-term transparency and credibility in the capital markets.

Building a Compliance Moat by Optimizing Internal Financial and Accounting Management

Faced with wild swings in the external environment, if crypto mining companies and pools only rely on expanding hash power or business transformations, they still can't truly take control. If crypto mining firms and pools want to move forward steadily through the cycles, they can consider building a more compliant and sustainable financial and accounting management system. The core of this system is ensuring the authenticity, timeliness, and comprehensiveness of financial and accounting data, so that it truly reflects operational results, reduces compliance risks, and provides management with reliable decision-making bases.

First, profits need to be made visible. Through automated data collection and reconciliation, companies can track hash power outputs and earnings item by item, precisely matching them with costs like electricity, depreciation, and maintenance. The gross margins and net margins presented this way aren't based on rough estimates anymore – they're verifiable results that provide a solid foundation for the company's strategic judgments. Going further, in the context of increasingly common cross-border setups, finance teams and management need a global strategic perspective. If ledgers from different jurisdictions, entities, and currencies can't be fully tallied, it's hard to form a complete financial picture, making it tough for management to respond timely and accurately to financing, audits, and regulatory requirements.

At the same time, integrating business and finance is key to boosting management efficiency. In mining pools, operational tasks like hash power allocation, user settlements, or fund flows, if totally reliant on manual handling, are often delayed and prone to inaccuracies. If these events can be linked in real-time with financial and accounting data, it will truly cut reconciliation costs, boost information transparency, and also help win trust from partners and capital markets.

Plus, with rising compliance and audit demands, companies must be able to provide traceable evidence chains. From original transactions to complete reports, any missing link brings potential risks. But if they have an audit-friendly accounting system, companies can handle financial disclosures, tax inspections, and capital market due diligence more confidently. Ultimately, through automation and systematization, finance teams can break free from tedious tasks like reconciliations and reports, focusing on higher-value work for the company, shifting the finance function from "recorder" to "growth booster."

If you have needs like this, the enterprise-level crypto finance suite FinTax Suite is your top choice. Based on modular design, seamless integration with ERP, through rule engines and multi-dimensional report support, FinTax Suite covers data capture, automatic bookkeeping, report generation, and compliance audits, helping companies achieve financial transparency and compliance in a global regulatory environment, aiding cost reductions and efficiency gains, and building a financial and accounting moat.

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