U.Today – The mining industry faces tough times as the average cost of producing one BTC reaches $96,100 for publicly traded miners when non-cash costs such as depreciation and stock-based compensation are included, according to a report by CoinShares analyst James. Butter filling.
As the data shows, average cash costs rose to $49,500 per BTC in Q2 2024, up from $47,200 in Q1, and there's no stopping it. The reason is that mining conditions are becoming more complex and require more capital.
Miners are reportedly continuing to expand their infrastructure despite high production costs and increasing difficulties. They expect the price of Bitcoin to rise to support future profitability.
However, there are still some operational challenges such as it is difficult to get credit at a good rate right now, especially after things like the FTX collapse. And high interest rates don't help.
As a result, many miners have begun issuing shares to finance their operations, leading to dilution of ownership. While the price of Bitcoin and miners' stock prices have been more closely correlated lately, miners did not benefit from price gains earlier in the year that were tied to the performance of the Bitcoin Spot ETF in the US. .
Major mining companies are also looking for new ways to manage rising costs. They are exploring options such as fixed-rate energy contracts, high-density configurations and artificial intelligence.
As the industry prepares for another halving, BTC miners are under pressure to improve cost efficiency and find alternative revenue streams to remain profitable.
This article was originally published on U.Today.
