Bitcoin Miners Cut Costs, AI Receives Post-Half: CoinShares

Bitcoin (BTC) miners cut costs and the artificial intelligence industry is struggling with the fallout from the network's April halving, cryptocurrency asset manager CoinShares said in an Oct. 28 report.

The increasing cost and difficulty of mining BTC has led to very different results among Bitcoin miners, according to the CoinShares Q3 mining report.

CoinShares said, “This year, the Bitcoin mining industry has faced significant challenges, with declining revenues and hash rates.”

“Despite this, miners continue to build new infrastructure and are committed to further expansion in anticipation of further price increases.”

Related: More bets on Bitcoin miners making money on AI

The Bitcoin network halving occurs every four years, halving the number of BTC produced per block.

The April event reduced mining rewards from 6.25 BTC to 3.125 BTC per block, significantly increasing the financial cost of mining a single bitcoin.

“The average cost to produce one bitcoin across all listed miners is now US$49,500 based on cash cost Q2 data, compared to US$47,200 in Q1, which we estimate is a profitable endeavor for most miners at current prices,” CoinShares said.

Bitcoin miners Cormint and TeraWulf stand out as the two lowest-cost producers, paying $15,000 and $19,000 in electricity costs for each BTC mined, respectively.

That compares to more than $20,000 for other miners. A few – including Marathon Digital Holdings and Hive Digital – have hourly electricity prices above $40,000 per BTC.

Bitcoin mining costs vary by factors including miners' power source, utility contracts, and mining equipment efficiency.

The less profitable BTC mining “may explain the increasing trend of mining companies to incorporate AI as their revenue stream,” the report said.

Bitcoin miner Hive has invested $66 million in Nvidia graphics processing units (GPUs) that are not used for AI workloads, Hive told Cointelegraph in October.

According to an August JPMorgan report, other Bitcoin miners are turning to mergers and acquisitions to lower BTC mining costs.

“The rich miners love it [Riot Platforms] And [Cleanspark] They have recently found other miners with turnkey facilities to increase their hashrate and increase their power lines,” JPMorgan said.

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