In late 2024, publicly listed mining companies faced a significant rise in Bitcoin mining costs, which reached $82,162 per coin, marking a 47% increase compared to the previous quarter.
Reasons for Increased Bitcoin Mining Costs
CoinShares identified several factors contributing to the increase, including accelerated hardware deployments, higher tax burdens, and an uptick in non-cash expenses like depreciation and stock-based compensation.
Impact of Taxes and Equipment on Costs
Hut 8 Mining stands out due to significant tax expenses. The average cash production cost among public miners was $75,767, but including non-cash items, the total average cost soared to $137,018 per Bitcoin. Hut 8 reported the highest costs among surveyed miners due to a $93 million deferred tax liability, leading to a mining cost exceeding $281,000.
Efficiency Strategies Among Miners
Despite rising costs, many mining firms are striving to improve operational efficiency. They continue to invest in next-generation mining equipment and explore cost-cutting strategies to remain competitive. As Bitcoin prices rise, miners hope that improved efficiency will help offset soaring production expenses in the quarters to come.
In conclusion, the rising Bitcoin mining costs in late 2024 stem from multiple factors, and miners are actively looking for ways to enhance their competitiveness amid the changing economic landscape.
