In a new report, CoinShares offers important insights into the economics of Bitcoin (BTC) mining, which is evolving following the network’s 2024 halving and hashrate increase.
According to CoinShares, the weighted average cash cost to mine a bitcoin among publicly traded mining firms jumped sharply by 47%, from $55,950 in Q3 2024 to approximately $82,162 in Q4. Excluding the non-standard Hut 8, the average cost was slightly lower at $75,767, but this still represents a significant 35% increase quarter-over-quarter.
When non-cash expenses such as depreciation and stock-based compensation are included, the total average cost rose to $137,018 per bitcoin, far exceeding Bitcoin’s current market price of around $95,000. Despite this, many miners have managed to remain profitable with rising Bitcoin prices and strategic efficiency improvements.
The Bitcoin network’s hashrate accelerated sharply in Q4, reaching an all-time high of 900 exahashes per second (Eh/s), beating CoinShares’ previous estimate of 765 Eh/s. The firm now predicts that the network could reach the symbolic 1 zettahash/second (Zh/s) milestone as early as July 2025 and climb to 2.0 Zh/s by early 2027.
This exponential growth was fueled by a combination of positive political developments and a strong Bitcoin price rally that encouraged miners to rapidly deploy new hardware.
But CoinShares notes a shift in investor sentiment: valuation multiples among mining firms have been squeezed, suggesting that Bitcoin mining is increasingly viewed as a net-zero business where one miner’s gain is another’s loss. As a result, many companies are turning to data center infrastructure and high-performance computing (HPC) hosting to diversify their revenue streams.
While most miners are seeing increased production costs, CleanSpark, Iren, and Cormint have bucked this trend, reducing their revenue costs per Bitcoin by 8%, 39%, and 44%, respectively.
A notable outlier was Hut 8, which reported a high tax expense of $281,000 per Bitcoin, due in part to a $93 million deferred tax liability related to unrealized gains on Bitcoin holdings. Additional financial burdens were due to interest expenses related to the $150 million Coatue convertible note and increased borrowing from Coinbase’s credit facility.
*This is not investment advice.
