Bitcoin miners report threefold profit margins amid rising costs

Bitcoin (CRYPTO:BTC) miners are currently experiencing a threefold profitability margin, despite the increasing difficulty of mining, as reported by Glassnode.

The Bitcoin Difficulty Regression Model estimates that the cost to mine a single Bitcoin is around $33,900.

On January 21, Bitcoin's price reached approximately $105,578, indicating a significant profit margin for miners.

However, this profitability is challenged by heightened competition, with hashrates rising steadily during the ongoing market surge.

Glassnode's data reveals that revenue per exahash currently stands at $60,800.

In April, miners faced a reduction in cash flow per mined block due to the Bitcoin halving event, which cut rewards from 6.25 BTC to 3.12 BTC.

Despite these challenges, miners have maintained a threefold profitability margin.

According to CoinWarz, the Bitcoin hashrate has increased from about 600 exahashes per second (EH/s) last year to between 700 EH/s and 900 EH/s today as more participants enter the mining sector.

Mining plays a crucial role in securing the Bitcoin network and has shown resilience that benefits energy grids as well.

For instance, Bitcoin miners reportedly saved Texas $18 billion by reducing the need for new gas peaker plants and stabilizing the grid.

In response to declining revenue and rising competition, many miners are diversifying their operations into high-performance computing and artificial intelligence sectors.

Hive Digital has notably repurposed part of its Nvidia machines for AI applications over the past year, generating over $2 per hour compared to just $0.12 from crypto mining.

Furthermore, Bitcoin miners are increasingly retaining their mined BTC reserves rather than selling them.

“In 2024, a notable shift emerged among Bitcoin miners, with many opting to retain a larger portion of their mined Bitcoin or refraining from selling altogether,” according to a report by Digital Mining Solutions and BitcoinMiningStock.io published on January 7.

At the time of reporting, the Bitcoin (BTC) price was $105,741.