Bitcoin (BTC) miners are cutting costs and embracing artificial intelligence as the industry continues to grapple with the consequences of the network’s April halving, cryptocurrency asset manager CoinShares said in an Oct. 28 report.
The increasing cost and difficulty of mining BTC has resulted in highly varied outcomes among Bitcoin miners, according to CoinShares’ Q3 mining report.
“The Bitcoin mining industry has faced significant challenges this year, with revenues and hash prices declining,” CoinShares said.
“Despite this, miners have continued to roll out new infrastructure and have committed to further expansion, anticipating future price increases.”
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The Bitcoin network’s halvings occur every four years and cut the number of BTC mined per block in half.
The April event reduced mining rewards from 6.25 BTC to 3.125 BTC per block, significantly increasing the cash costs of mining one Bitcoin.
“We estimate the average cost to produce one Bitcoin across all listed miners is now US$49,500 based on cash costs Q2 data, compared to US$47,200 in Q1, implying that for most miners at current prices it is a profitable endeavour,” CoinShares said.
Bitcoin miners Cormint and TeraWulf stand out as the two of the lowest-cost producers, paying approximately $15,000 and $19,000 in electricity costs for each BTC mined, respectively.
That compares to more than $20,000 for other miners. Some — including Marathon Digital Holdings and Hive Digital — clock electricity costs in excess of $40,000 per BTC.
Bitcoin mining costs vary based on factors including the miners’ power source, utility contracts and efficiency of mining equipment.
Less profitable BTC mining “may explain the rising trend of mining companies diversifying their income streams to include AI,” according to the report.
Bitcoin miner Hive invested $66 million in Nvidia graphic processing units (GPUs), which are not used for AI workloads, Hive told Cointelegraph in October.
Other Bitcoin miners are turning to mergers and acquisitions to cut BTC mining costs, according to an August JPMorgan report.
“Cash-rich miners like [Riot Platforms] and [Cleanspark] acquired other miners with turn-key facilities to increase near-term hashrate and increase their power pipeline,” JPMorgan said.
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