We all know that halving will double production costs, and the media depicts this fact every four years as a survival threat to Bitcoin. Profit-seeking miners do not have to deal with fluctuating mining difficulty and energy costs, but if prices rise, at least they can make more money from every Bitcoin they mine. The following will provide a detailed introduction.
How much does it cost to mine one Bitcoin a year after the halving?
We all know that halving will double production costs, and the media depicts this fact every four years as a survival threat to Bitcoin. Profit-seeking miners must also deal with fluctuating mining difficulty and energy costs. But if prices rise, at least they can make more money from every Bitcoin they mine.
With the rise in BTC prices, the high prices have attracted more miners, pushing both Bitcoin's total hash rate and difficulty to all-time highs. In fact, while mining revenues are roughly in line with the five-year average, the current mining difficulty is five times that of April 2021 and 40% higher than before the last halving.
As such, mining Bitcoin is more challenging than ever before. But how much does it cost to mine one BTC now? It's always hard to say, as the answer largely depends on electricity and other indirect costs. Cambridge currently estimates the cost per BTC to be $48,671.
Strong Bitcoin prices have brought miners' revenues nearly in line with the peaks of the bull markets in 2021 and 2024 (Source: Blockworks Research)
Let's take Marathon as an example, this $4 billion mining giant accounts for about 7% of Bitcoin's total hash rate.
According to documents submitted by Marathon to the U.S. Securities and Exchange Commission, its mining revenue cost in the three quarters leading up to the most recent halving was $224.95 million.
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Marathon mined a total of 10,542 BTC during the same period, which means the estimated production cost for each Bitcoin is slightly below $21,500. At that time, the average trading price of Bitcoin was $39,300, indicating a potential profit of $17,800 per Bitcoin.
In the third and fourth quarters of last year, Marathon's estimated production cost using the same method was $43,270—doubling since the halving, consistent with Cambridge's estimate—while the average trading price was $72,250. This means potential profits close to $29,000, even higher than before the halving.
(Marathon CEO Fred Thiel stated in February that Marathon's direct energy cost per Bitcoin last year totaled $28,801, although this includes some costs prior to the doubling of production costs. Marathon's profit in Q4 2024 exceeded $500 million.)
A year after the halving, according to Marathon's data, Bitcoin block subsidies remain sufficiently generous, at least for the most capital-rich operations, given current prices. According to Luxor's Hashrate Index, other miners may sometimes experience losses, as the index shows profitability at historic lows. This is understandable, as there have been five halvings already.
In any case, Bitcoin has three years to double its price to offset the next price increase. There is plenty of time.
Satoshi's Prophecy
"I am sure that in 20 years, either the volume will be very large, or there will be no volume at all." Satoshi said this on Valentine's Day in 2010—more than 15 years ago. This is an appendix to comments about the necessity of transaction fees in a system where block rewards gradually decrease to zero over time. "Decades later, when rewards become too small, transaction fees will become the main compensation for nodes."
So, how close is he to the truth, less than five years from Satoshi's assumption?
Bitcoin processes over 11.5 million transactions per month, up from less than 8 million at the beginning of 2022, averaging a BTC transaction volume of $1.8 trillion. On one hand, this could be 'very large' as Satoshi predicted, but over 98% of miners' revenue still comes from block subsidies. After a few more halvings, the current dynamics may no longer hold, so debates about the structure of Bitcoin's fee market are expected to intensify over time. This article on how much it costs to mine one Bitcoin a year after the halving concludes here. For more related content on Bitcoin mining costs, please search for previous articles on Jiexie.com or continue browsing related articles below. We hope everyone continues to support Liang Ge.