Bitcoin Production Costs Rise 9% Amid Increased Hashrate and Energy Prices

Bitcoin mining costs have risen significantly, with estimates now above $70,000 as miners struggle against increased network hashrate and energy prices. Production costs increased by over 9% since the first quarter of 2025. Public mining firms are focusing on efficiency, while stocks are diverging depending on revenue sources. Companies are exploring AI and computing services as a way to diversify income.

Bitcoin mining costs have surged recently, with the median expense to mine a single Bitcoin now eclipsing $70,000 as of the second quarter of 2025. This sharp rise comes as miners face challenges from an increased network hashrate and climbing energy costs, according to a recent report by mining research firm TheMinerMag. Just in the first quarter of this year, the cost jumped from $52,000 in Q4 2024 to around $64,000, signalling an over 9% increase expected in Q2.

TheMinerMag’s update highlights that this increase to $70,000 represents a near 9.4% hike in production costs. While Bitcoin’s trading price sits at approximately $107,635, giving many miners a cushion against these rising costs, it’s important to note that the estimates provided do not account for the depreciation of mining equipment or revenue from renting out machines—factors that play a critical role in overall profitability.

As production expenses rise, public mining firms are under pressure to maintain the efficiency of their operations, particularly focusing on fleet hashcost, which refers to the cost of the computational power needed to mine Bitcoin. According to TheMinerMag, during Q1, the median fleet hashcost stabilised at about $34 per petahash per second. However, companies like Terawulf and Bitdeer saw their production costs soar by over 25% largely due to surging energy prices, which nearly doubled from $0.041 to $0.081 per kilowatt-hour since early 2024.

Mining stocks are also showing signs of divergence as investors increasingly favour companies that generate revenue from sources beyond Bitcoin mining. Between May 4 and June 13, while Bitcoin itself saw a modest 1.35% gain, IREN (IREN) jumped by an impressive 21.4%. Core Scientific (CORZ), Bit Digital (BTBT), and Cipher Mining (CIFR) also reported double-digit increases during this period. However, some companies like Canaan (CAN) and Bitfarms (BITF) struggled significantly, plummeting by over 21%.

This growing divide in mining stock performance underscores a shift in investor focus towards diversification strategies beyond traditional Bitcoin mining. Recently, mining companies have begun to explore ventures in AI hosting and high-performance computing services, hoping to bolster their revenue streams and mitigate the risks associated with fluctuating Bitcoin prices. Interestingly, it seems even the traditionally risk-adverse Baby Boomers, worth a staggering $79 trillion, are now looking into the Bitcoin market, indicating a substantial shift in demographics and attitudes toward cryptocurrency investments.