The study reveals that the weighted average cash cost to mine a Bitcoin for publicly traded mining firms surged by 47%, rising from $55,950 in Q3 2024 to approximately $82,162 in Q4. Excluding the outlier Hut 8, the average cost was slightly lower at $75,767, marking a notable 35% quarter-on-quarter increase.
When factoring in non-cash expenses such as depreciation and stock-based compensation, the total average cost reached $137,018 per Bitcoin, significantly surpassing Bitcoin’s current market price of about $95,000. Despite these rising costs, many miners remain profitable thanks to Bitcoin’s upward price trends and improved operational efficiencies.
The network’s hashrate saw a sharp rise in Q4, reaching a record-breaking 900 exahashes per second (Eh/s), surpassing CoinShares’ prior forecast of 765 Eh/s. The firm now projects that the network could achieve the symbolic 1 zettahash/second (Zh/s) milestone by July 2025 and 2.0 Zh/s by early 2027.
This rapid growth is attributed to favorable political developments and a robust Bitcoin price rally, prompting miners to deploy new hardware at an accelerated pace.
However, CoinShares highlights a shift in investor sentiment, with valuation multiples for mining firms tightening. This suggests Bitcoin mining is increasingly seen as a net-zero business where gains by one miner equate to losses for another. To diversify revenue streams, several companies are venturing into data center infrastructure and high-performance computing (HPC) hosting.
Despite rising production costs across most miners, CleanSpark, Iren, and Cormint have notably reduced their revenue costs per Bitcoin by 8%, 39%, and 44%, respectively.
Hut 8 stands as a notable exception, reporting a high tax expense of $281,000 per Bitcoin, partly due to a $93 million deferred tax liability from unrealized gains on Bitcoin holdings. Additional financial pressures stem from interest expenses related to a $150 million Coatue convertible note and increased borrowing from Coinbase’s credit facility.
*This information is not intended as investment advice.
