Bitcoin Mining Costs Surge, Threatening Profitability Amid Soaring Hashrates

CoinShares has released a report detailing significant increases in Bitcoin (BTC) mining costs following the 2024 halving and a surge in network hashrate. The report reveals that the weighted average cash cost for mining a Bitcoin jumped by 47% from Q3 2024 to Q4 2024, reaching around $82,162, while the adjusted cost stood at approximately $75,767 for most firms. When non-cash expenses were factored in, total costs soared to $137,018, well exceeding Bitcoin’s current market price of about $95,000. Despite this, several miners remain profitable due to rising Bitcoin prices and operational improvements. The report also documents that the Bitcoin network’s hashrate hit a record 900 exahashes per second in Q4, and predicts that the network could hit the symbolic milestone of 1 zettahash/second as early as July 2025, eventually climbing to 2.0 zettahashes/second by early 2027. The report points to a growing consensus that Bitcoin mining is evolving toward a net-zero business model, causing valuation multiples among mining firms to compress, while some companies have countered rising costs with significant efficiency measures.