title: Bitcoin Mining Costs Surge to New Highs in Late 2024, Says CoinShares

The cost of mining one Bitcoin (BTC) soared in the fourth quarter of 2024, according to a new industry report from CoinShares.

The cost of mining one Bitcoin (BTC) soared to new highs in the fourth quarter of 2024, according to a recent industry report from CoinShares.

CoinShares’ report, which surveyed seven publicly listed Bitcoin miners, found that the average production cost was $82,162 per Bitcoin. This represents a sharp 47% increase compared to the previous quarter.

The report identified several factors that drove up mining costs. Public miners accelerated hardware deployments and faced higher tax burdens. Additionally, non-cash expenses, such as depreciation and stock-based compensation, also saw an uptick.

Excluding Hut 8 Mining, which reported a significant tax expense, the average cash production cost among public miners stood at $75,767. Factoring in non-cash items pushed the total average production cost to a steeper $137,018 per Bitcoin.

Tax Expenses and Hardware Turnover Fuel Rising Costs

CoinShares noted that faster hardware turnover and competition among miners contributed to rising operational costs. At the same time, fluctuating Bitcoin prices and compressed valuation multiples made profitability harder to maintain.

CoinShares highlighted Hut 8 as an example of a miner facing difficulties. The company recorded the highest unit cost among all surveyed miners, driven by a $93 million deferred tax liability and elevated interest payments from convertible notes and credit facilities.

As a result, Hut 8’s total cost per mined Bitcoin soared to over $281,000 during the quarter.

Miners Focus on Efficiency Gains

Despite the challenges of rising costs, many mining firms are working to improve operational efficiency. Companies like Bitfarms and MicroStrategy continue to invest in next-generation mining equipment and explore cost-cutting strategies to remain competitive in a tightening market.

With Bitcoin’s price trading above the $70,000 mark, miners will need to realize substantial efficiency gains and hope for a sustained bullish market to offset soaring production expenses in the quarters ahead.