The cost of mining Bitcoin is escalating, potentially squeezing profit margins for less efficient miners, with the median cost estimated to exceed $70,000 in the second quarter of 2025.
This marks a significant increase from previous quarters. In Q4 2024, the median cost was around $52,000. By Q1 2025, it had jumped to $64,000, representing a 23% increase. The projected rise to $70,000 in Q2 2025 would be a further increase of approximately 9.4% from the previous quarter.
“Direct production costs are expected to surpass $70,000 in the current quarter,” TheMinerMag stated in its May/June industry update.
Despite the rising production costs, Bitcoin’s current trading price, hovering around $107,635, provides a buffer for most miners. However, it’s important to note that these production cost estimates don’t fully account for factors like the depreciation of mining equipment or revenue generated from renting out mining machines.
With the increasing costs, public mining companies are prioritizing operational efficiency, particularly focusing on their fleet hashcost. Fleet hashcost refers to the cost of computing power required to mine Bitcoin.
In Q1 2025, the median fleet hashcost for public miners remained relatively stable at approximately $34 per petahash per second (PH/s). However, some companies experienced substantial increases in production costs. Terawulf and Bitdeer, for example, saw their costs rise by over 25% during the same period.
Terawulf attributed its cost increase primarily to escalating energy expenses. Their energy costs nearly doubled, rising from $0.041 per kilowatt-hour (kWh) in Q1 2024 to $0.081 per kWh in Q1 2025.
The rising production costs and varying operational efficiencies are contributing to a divergence in the performance of Bitcoin mining stocks. Investors are increasingly favoring companies that have diversified their revenue streams beyond solely Bitcoin mining.
Between May 4 and June 13, IREN stock (IREN) experienced a significant surge, climbing 21.4%. Core Scientific (CORZ), Bit Digital (BTBT), and Cipher Mining (CIFR) also recorded double-digit gains during this period.
Conversely, Canaan (CAN) and Bitfarms (BITF) underperformed, with each experiencing a decline of over 21% during the same timeframe.
