Bitcoin mining costs surge, public miners face record expenses

Recent industry data shows that the average cash cost for public Bitcoin miners to produce one BTC has risen to around $74,600, while the total cost—including depreciation, equipment amortization, and stock-based compensation—has increased to about $137,800.

The rise in mining costs is mainly due to the 2024 halving, which cut block rewards in half, coupled with rising energy prices, a rapid increase in network difficulty, and the need for constant hardware upgrades to keep up with intensifying global mining competition. With transaction fees remaining low and providing little supplemental income, many public miners are now seeing shrinking profit margins, prompting some to pivot to high-performance computing and AI data center services to diversify their revenue streams.

The ever-increasing cost structure is again putting pressure on less efficient miners and may accelerate consolidation in the mining sector. At the same time, it sets a de facto price floor for Bitcoin, as miners are unwilling to sell newly minted coins below the cost of production.