Listed Bitcoin miners slip below cash breakeven

Bitcoin miners as a group fell below cash breakeven in the second quarter, according to a new analysis by CoinShares. The weighted average pre-tax production cost for mining Bitcoin reached approximately $75,500 per coin, surpassing the quarter-end price of $58,400. This shift marked a significant deterioration in industry economics, driven by weakened Bitcoin prices, reduced mining revenue, and persistent high operating costs, as stated in the report.

Bitcoin's price rebounded to around $76,000 by the time of this report, after a sharp decline earlier in the week. Nonetheless, mining revenue per unit of computing power, known as hash price, has recovered to approximately $38 per petahash per second per day from a record low of $27.70 in June. This improvement has seen many operators return above cash breakeven, though margins remain tight and vary depending on electricity contracts, machine efficiency, and corporate overhead.

The analysis revealed that the pressure was unevenly distributed among companies. American Bitcoin, Bitdeer, HIVE Digital Technologies, and IREN were among those mining below their realized Bitcoin prices during the quarter, while CleanSpark and Riot Platforms were near breakeven. MARA Holdings, for instance, incurred a cash cost of about $86,126 per Bitcoin, which was roughly $15,800 higher than its realized revenue per coin.

These discrepancies in profitability are due to the distinction between direct mining costs and broader all-in accounting costs. Factors like depreciation, stock-based compensation, interest, and administrative expenses can considerably increase reported costs per Bitcoin, especially for companies concurrently developing AI infrastructure. This distinction is crucial as the $75,500 figure is a backward-looking weighted average rather than a consistent breakeven price across the industry.

Some listed miners are shifting towards artificial-intelligence and high-performance computing infrastructure, which can offer steadier returns through long-term power contracts and data-center demand. CoinShares estimates that AI-related operations can generate about $1.5 million in annual profit per megawatt, compared to around $500,000 per megawatt from Bitcoin mining under current industry conditions.

Consequently, at least 35 exahashes per second of computing capacity, equivalent to about 4.7% of the network's total hashrate, are set to exit the publicly listed mining group.