According to Cointelegraph, Bitcoin (BTC) miners are adopting cost-cutting strategies and integrating artificial intelligence (AI) to navigate the challenges posed by the network’s April halving. The latest Q3 mining report from cryptocurrency asset manager CoinShares highlights the varied outcomes among Bitcoin miners due to the increasing cost and difficulty of mining BTC.
The report indicates that the Bitcoin mining industry has faced significant hurdles this year, with declining revenues and hash prices. Despite these challenges, miners have continued to deploy new infrastructure and are planning further expansions, anticipating future price increases. The Bitcoin network undergoes halvings every four years, reducing the number of BTC mined per block by half. The April halving event cut mining rewards from 6.25 BTC to 3.125 BTC per block, significantly raising the cash costs of mining one Bitcoin.
CoinShares estimates that the average cost to produce one Bitcoin across all listed miners is now $49,500 based on Q2 cash costs data, up from $47,200 in Q1. This suggests that for most miners, current prices make mining a profitable endeavor. Notably, Bitcoin miners Cormint and TeraWulf are among the lowest-cost producers, with electricity costs of approximately $15,000 and $19,000 per BTC mined, respectively. In contrast, other miners face electricity costs exceeding $20,000, with some, including Marathon Digital Holdings and Hive Digital, incurring costs over $40,000 per BTC.
The variation in Bitcoin mining costs is influenced by factors such as power sources, utility contracts, and the efficiency of mining equipment. The report suggests that the less profitable nature of BTC mining may be driving mining companies to diversify their income streams to include AI. For instance, Bitcoin miner Hive invested $66 million in Nvidia graphic processing units (GPUs), which are not used for AI workloads. Additionally, some Bitcoin miners are pursuing mergers and acquisitions to reduce BTC mining costs. An August report from JPMorgan noted that cash-rich miners like Riot Platforms and Cleanspark have acquired other miners with turn-key facilities to boost near-term hashrate and expand their power pipeline.
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