The Bitcoin mining industry is garnering significant interest from institutional investors, driven by a favorable regulatory environment and increasing profitability. This article explores the current trends and future prospects of this sector.
Profitability of Bitcoin Mining
Bitcoin mining remains a profitable endeavor. According to CoinShares, the average cost to mine 1 BTC for US miners in Q3 2024 was $55,950. However, different assessment models yield varying results: MacroMicro estimates this cost to exceed $92,000, while the Glassnode model estimates it at approximately $34,400. Regional differences in electricity costs are also significant — in Ireland, the cost to produce 1 BTC reaches $321,000, while in Iran, it is just $1,300.
Economic Sustainability and Appeal
Miners not only receive block rewards but also benefit from network transaction fees, enhancing the economic appeal of Bitcoin mining. Over the past month, these fees have ranged from $360,000 to $1.3 million, averaging $595,000 daily. Such revenue diversification strengthens the resilience of the mining business model. The existing model has become less attractive for institutional investments in the US.
Rise of Institutional Investments
Institutional interest in Bitcoin mining is on the rise: in 2024, the US accounted for over 40% of the global Bitcoin network's hashrate. According to research by EY-Parthenon and Coinbase, 83% of global institutions plan to increase their crypto allocations this year. Notable investments include Riot Platforms and CoreWeave, alongside a growing number of IPOs related to mining companies, signaling a positive trend.
The strong support from institutional investors and innovations in AI suggest a promising future for Bitcoin mining. The market is evolving, and the US could become a world leader in this field.
