Ethiopia has reduced electricity delivered to Bitcoin miners to 23% of contracted levels as lower water inflows strain the country's hydroelectric reservoirs, according to a Bloomberg report.
The reductions stem from dry conditions that have decreased water inflows into reservoirs by 20%. Ethiopian Electric Power (EEP) CEO Ashebir Balcha said the company implemented the cuts to prioritize households and manufacturers over mining operations.
EEP initially reduced deliveries to 75% of contracted levels, then eased to 50% before settling at 23%. The company plans to reassess conditions in October and may impose further reductions or restrict electricity exports to neighboring countries.
Bitcoin miners accounted for 35% of EEP's revenue last fiscal year and consume approximately one-third of Ethiopia's electricity output. The country's inexpensive hydropower has attracted international mining operations, including Phoenix Group, which expanded its Ethiopian mining capacity to 132 megawatts in April 2025.
Mining economics under pressure
Economist Saifedean Ammous suggested that global Bitcoin mining electricity consumption and capital expenditure may have peaked in 2024 to 2025. He noted that Bitcoin's price would need to rise more than 18.92% annually just to maintain the dollar value of newly mined coins, independent of dollar depreciation considerations.
Under Bitcoin's halving mechanism, miner rewards are cut in half approximately every four years. The price of Bitcoin has declined more than 35% over the last 12 months.
Ammous also cited competition from artificial intelligence data centers, which offer miners an alternative way to monetize their electricity connections and infrastructure. Public miners may require around $50 billion to develop planned AI infrastructure as weaker mining economics encourage capacity redirection, according to estimates cited in industry reports.
Ammous characterized his conclusions as testable hypotheses, noting that substantially higher transaction fees or a sustained recovery above Bitcoin mining's previous electricity-consumption peak could invalidate his analysis.
