1. Increase in Electricity Cost
2. Impact of Bitcoin Halving
3. Cost Reduction Measures

In FY24, IREN experienced a significant increase in its average net electricity cost per Bitcoin mined, rising from $11k to $18.1k. This trend reflects the growing challenges faced by Bitcoin miners in a highly competitive market.

Increase in Electricity Cost

The increase in electricity costs is a direct consequence of heightened competition within the Bitcoin mining industry. As more miners enter the market and global hashrate continues to climb, the difficulty of mining new Bitcoins increases, requiring more energy to achieve the same level of output. This has led to higher electricity consumption and, consequently, higher costs per Bitcoin mined.

Impact of Bitcoin Halving

Additionally, the Bitcoin halving event in April 2024, which reduced the block reward from 6.25 BTC to 3.125 BTC, has further intensified the competition. With fewer Bitcoins available for mining, miners must operate at peak efficiency to remain profitable. For IREN, this has meant a greater focus on optimizing energy usage and securing cost-effective power sources.

Cost Reduction Measures

Despite the increase in electricity costs, IREN has managed to maintain a strong financial performance, thanks in part to its strategic transition to spot power pricing. This move has allowed the company to better manage its energy expenses in real-time, mitigating some of the impacts of rising costs. However, the higher electricity costs still represent a significant challenge for the company, as it continues to navigate the complexities of the global Bitcoin mining market. To address these challenges, IREN is investing in new technologies and infrastructure designed to improve energy efficiency and reduce overall consumption. The company’s focus on sustainability and the use of renewable energy sources is also a key part of its strategy to manage rising costs while maintaining its competitive edge.

Thus, despite the increased electricity costs, IREN continues to actively implement measures to reduce expenses and maintain competitiveness in the Bitcoin mining market.