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Bitcoin production costs rose by 9% due to increased hash rates and energy prices
The average cost of mining a single Bitcoin was only $52,000 in the fourth quarter, but it jumped by 23% in the first quarter and rose again in the second quarter.
Bitcoin production costs rose by 9% due to increased hash rates and energy prices
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The average cost of mining a single Bitcoin is expected to rise to over $70,000 in the second quarter as miners deal with increasing network hash rates and energy prices.
According to a report released on Monday by Bitcoin mining research company TheMinerMag, the average cost of Bitcoin production
Bitcoin
107,343 dollars
It has already risen from $52,000 in the last quarter of 2024 to $64,000 in the first quarter of 2025. This rate is expected to increase by over 9% in the second quarter.
"Direct production costs are expected to exceed $70,000 in the current quarter," TheMinerMag reported in its industry update for May and June.
The implicit cost of producing Bitcoin by company. Source: TheMinerMag
The rise in Bitcoin price gives miners some breathing room
An increase to $70,000 would represent a rise of about 9.4%, which could pressure less efficient Bitcoin miners as their profit margins shrink.
With Bitcoin trading at around $107,635, most miners still have sufficient reserves - although production cost estimates do not account for the diminishing value of mining equipment and factors in Bitcoin earned from machines leased to customers, among other things.
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Maintaining low fleet costs is a top priority
With rising mining production costs, public companies have focused on maintaining their operations as efficiently as possible, especially regarding the fleet's hash rate cost - the cost of computing power for Bitcoin mining - as noted by TheMinerMag.
In the first quarter, the average fleet hash rate cost of public mining companies stabilized at around $34 per petahash per second. However, some companies, including Terawolf and Bitdeer, experienced production cost increases of more than 25%, according to the report.
Terawolf stated that the increase is primarily due to rising energy costs, which rose to $0.081 per kilowatt-hour in the first quarter, nearly double the $0.041 per kilowatt-hour reported in the first quarter of 2024.
The divergence of mining stocks rewards investors for diversifying revenue
Meanwhile, Bitcoin mining stocks have diverged as investors increasingly favor companies with revenue streams beyond Bitcoin mining, according to TheMinerMag.
While the value of Bitcoin rose by 1.35% between May 4 and June 13, the value of IREN (IREN) increased by 21.4% during the same timeframe, with Core Scientific (CORZ), Bit Digital (BTBT), and Cipher Mining (CIFR) also achieving double-digit gains.
In contrast, the performances of Canaan (CAN) and Bitfarms (BITF) were the worst, with each declining by more than 21%.
Related: One of Bitcoin's early users says Bitcoin could see another 100-fold cycle
The share price of the largest Bitcoin mining companies has changed since May 4. Source: TheMinerMag
"The gap between the highest and lowest performing mining stocks has widened significantly, highlighting the increasing focus from investors on diversifying revenue beyond Bitcoin mining."
AI hosting and high-performance computing services are among the core operations that Bitcoin miners have engaged in recent months.
