Background Information: The production cost of Bitcoin has significantly increased due to the rise in network hash rate and energy prices. In Q4 2024, the median cost to mine one Bitcoin was $52,000, rising to $64,000 in Q1 2025, and is expected to exceed $70,000 in Q2 2025, representing an increase of approximately 9.4%.\n\nKey Events: The rising production costs may put pressure on less efficient miners, although with Bitcoin priced around $107,635, most miners still maintain some profit margin. Public mining companies are striving to improve operational efficiency, especially regarding computational power costs. Some companies like Terawulf and Bitdeer have seen production costs increase by over 25%, mainly due to higher energy prices. Investor attention has also diverged among mining companies, with a preference for those with diversified revenue streams. Companies such as IREN, Core Scientific, Bit Digital, and Cipher Mining have performed better, while Canaan and Bitfarms have underperformed.\n\nPotential Impact: Mining companies are expanding into areas like AI hosting and high-performance computing services to diversify income and adapt to the challenges posed by rising Bitcoin mining costs. SoSoValue has been mentioned in related reports.

The median cost of mining a single Bitcoin is estimated to have climbed above $70,000 in the second quarter as miners navigate a rise in network hashrate and energy prices. According to a report on Monday from Bitcoin mining research firm TheMinerMag, the median cost of producing Bitcoin ( BTC ) already rose from $52,000 in the last quarter of 2024 to $64,000 in Q1 2025. This is expected to increase by over 9% in Q2. “Direct production costs are expected to surpass $70,000 in the current quarter,” TheMinerMag said in its May/June industry update. A rise to $70,000 would mark a near 9.4% increase, potentially pressuring less efficient Bitcoin miners as their profit margins shrink. With Bitcoin trading at around $107,635, most miners still have a sufficient buffer — though the production cost estimates don’t include the depreciating value of the mining rigs and factors in Bitcoin earned from machines that are rented out to clients, among other things. With mining production costs on the rise, public companies have been focused on keeping their operations as efficient as possible, particularly when it comes to their fleet hashcost — the cost of computing power to mine Bitcoin — TheMinerMag noted. In Q1, the median fleet hashcost from public miners held steady at approximately $34 per petahash per second (PH/s). However, some firms, including Terawulf and Bitdeer, saw production costs rise by over 25%, according to the report. Terawulf said the increase was primarily due to rising energy costs, which spiked to $0.081 per kilowatt-hour (kWh) in Q1, nearly double the $0.041 per kWh reported in Q1 2024. Meanwhile, Bitcoin mining stocks have been diverging as investors increasingly favor firms with revenue streams beyond Bitcoin mining, TheMinerMag said. While Bitcoin increased 1.35% between May 4 and June 13, IREN (IREN) soared 21.4% over the same time frame, with Core Scientific (CORZ), Bit Digital (BTBT), and Cipher Mining (CIFR) also posting double-digit gains. In contrast, Canaan (CAN) and Bitfarms (BITF) have been the worst performers, each falling by over 21%. Related: Early Bitcoin adopter says BTC could have another 100X cycle “The spread between the top and bottom-performing mining equities has widened significantly, underscoring growing investor focus on revenue diversification beyond Bitcoin mining.” AI hosting and high-performance computing services are among the main operations that Bitcoin miners have ventured into in recent months. Magazine: Baby boomers worth $79T are finally getting on board with Bitcoin 

Bitcoin production costs have significantly increased due to rising computing power and energy prices, prompting mining companies to accelerate diversification.