Definition ∞ Narrowing Profit Margin describes a situation where the difference between revenue and costs decreases, resulting in a lower percentage of revenue retained as profit. This trend indicates increasing operational expenses or decreasing sales prices, putting pressure on a business’s financial health. It signals reduced profitability. This financial condition requires strategic adjustments.
Context ∞ For cryptocurrency mining operations or digital asset trading firms, narrowing profit margins can be a significant concern, often driven by rising energy costs, increased network difficulty, or heightened competition. News often reports on these financial pressures, explaining how they influence investment decisions and operational strategies within the crypto industry. This trend impacts business sustainability.
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