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Bitcoin’s Crucial Threshold Exposed: Mining becomes unprofitable if BTC drops below this level

Unveiling Bitcoin's Break-Even Point: The Price at which mining turns unprofitable

April 27, 2025
in Business, Coins, Mining, News, Technology
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CoinShares’ latest report provides valuable insights into the shifting economics of Bitcoin (BTC) mining, influenced by the network’s 2024 halving and increased hashrate.

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.

Digital image of bitcoin. on a gold coin

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.

Tags: BitcoinBTCCryptocurrencyFinanceMining

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