Bitcoin Mining Costs Jump To $137,000 Per Coin When Accounting For Non-Cash Expenses: CoinShares
Bitcoin (CRYPTO: BTC) mining expenses rose sharply in the final quarter of 2024, with CoinShares reporting that the total average cost to produce one Bitcoin, including non-cash items, climbed to $137,018.
This figure includes depreciation and stock-based compensation, offering a more comprehensive look at the financial stress facing miners despite the strength in Bitcoin’s market price.
What Happened: According to CoinShares’ Q4 2024 Mining Report, the weighted average cash cost to produce a Bitcoin among publicly listed miners jumped 47% quarter-over-quarter, from $55,950 in Q3 to $82,162 in Q4.
Excluding outliers like Hut 8 (NASDAQ:HUT), which saw costs skewed by a large deferred tax expense, the cash cost averaged $75,767.
Despite the rising cost base, most miners remained marginally profitable, with Bitcoin trading around $82,000 throughout Q4.
However, the inclusion of non-cash expenses, such as accelerated depreciation of mining equipment and stock compensation, paints a more complex and potentially concerning picture for the industry.
The $137,018 total average cost represents a significant gap between headline profitability and actual financial sustainability when all expenses are factored in.
ASIC Depreciation And Competitive Pressures
A major driver of these costs is the fast-paced depreciation cycle of ASIC (application-specific integrated circuit) hardware, which must be frequently upgraded to remain competitive.
Unlike gold mining equipment, which maintains utility over long periods, Bitcoin mining hardware quickly becomes obsolete, forcing firms into continuous reinvestment.
“This dynamic results in a unique …
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