After the big dump of Bitcoin, are the miners still doing well?

Written by: Prathik Desai

Compiled by: Chopper

The financial logic of Bitcoin miners is quite simple: they rely on fixed protocol income for survival, yet face fluctuating real-world expenses. When the market is volatile, they are the first group to feel the pressure on their balance sheets. Miners' income comes from selling the mined Bitcoins, while their operating costs mainly consist of the electricity bills for running the heavy computers required for mining.

This week, I tracked some key data on Bitcoin miners: the rewards paid to miners by the network, the costs of earning these revenues, the remaining profit after deducting cash expenses, and the final net profit after accounting.

With the current Bitcoin price below the level of $90,000, miners are in trouble. Over the past two months, miners' 7-day average income has decreased by 35% from $60 million to $40 million.

Let me break down the key logic in detail.

The income mechanism of Bitcoin is fixed and encoded in the protocol. The mining reward for each block is 3.125 bitcoins, with an average block time of 10 minutes, producing about 144 blocks per day, which corresponds to an approximate daily mining output of 450 bitcoins. Over a 30-day period, global Bitcoin miners accumulate 13,500 bitcoins, which, at the current price of around 88,000 USD per bitcoin, amounts to a total value of about 1.2 billion USD. However, if this income is distributed across a record 1,078 EH/s (exahash) hash rate, the final income per TH/s (terahash) hash rate is only 3.6 cents per day, which is the entire economic foundation supporting the secure operation of this 1.7 trillion USD network. (Note: 1 EH/s = 10^18 H/S; 1 TH/S = 10^12 H/S)

In terms of costs, electricity fees are the most critical variable, and their level depends on the mining location and the efficiency of the mining machines.

If using a modern mining machine at S21 level (17 joules per terahash power consumption) and able to obtain cheap electricity, miners can still achieve cash profits. However, if the mining machines are primarily old equipment or if they have to pay high electricity costs, then each hash calculation will increase costs. At the current hash price (affected by network difficulty, Bitcoin price, block subsidies, and transaction fees), an S19 mining machine using electricity at $0.06 per kilowatt-hour can barely break even. Once network difficulty increases, Bitcoin price slightly drops, or electricity costs surge, its economic viability will further deteriorate.

Let me analyze with some specific data.

In December 2024, CoinShares estimated that the cash cost for publicly listed mining companies to mine one Bitcoin in the third quarter of 2024 would be approximately $55,950. Today, Cambridge University's estimate has risen to about $58,500. There are differences in the actual mining costs among different miners: the largest publicly listed Bitcoin mining company, Marathon Digital (stock code MARA), has an average energy cost of $39,235 for mining each Bitcoin in the third quarter of 2025; the second largest listed mining company, Riot Platforms (stock code RIOT), has a cost of $46,324. Despite Bitcoin's price dropping 30% from its peak to $86,000, these mining companies are still profitable. However, this is not the whole truth.

Miners also need to consider non-cash expenses, including depreciation, impairment, and stock option compensation, which together make mining a capital-intensive industry. Once these costs are accounted for, the total cost of mining 1 bitcoin can easily exceed $100,000.

The mining costs of top mining companies Marathon and Riot

MARA uses both its own mining machines and third-party hosted equipment for mining. MARA needs to pay for electricity, depreciation, and hosting fees. Rough calculations show that its total mining cost per bitcoin exceeds $110,000. Even CoinShares estimates that the total mining cost in December 2024 will be around $106,000.

On the surface, the Bitcoin mining industry seems robust. The cash profit margins are substantial, there is potential for accounting profitability, and the operational scale is large enough to raise funds at will. However, a deeper analysis reveals why more and more miners choose to hold the Bitcoin they mine, or even increase their Bitcoin holdings from the market, rather than selling immediately.

Bitcoin reserves of leading mining companies

Mining companies like MARA are able to cover costs because they have auxiliary businesses and can access the capital markets. However, many other mining companies could fall into losses as soon as the network difficulty rises again.

Overall, there are two coexisting breakeven scenarios in the mining industry:

The first type is large industrial-scale mining companies that have efficient mining machines, cheap electricity, and light capital balance sheets. For them, the daily cash flow will only turn negative when the price of Bitcoin drops from $86,000 to $50,000. Currently, they make more than $40,000 in cash profit for each Bitcoin mined, but whether they can achieve accounting profitability at the current price level varies from company to company.

The second type is the remaining group of miners, who will find it difficult to maintain a break-even point once depreciation, impairment, and stock option expenses are accounted for.

Even with a conservative estimate of the comprehensive cost of each Bitcoin between $90,000 and $110,000, it means that many miners have fallen below the economic breakeven point. The reason they can continue mining is that the cash costs have not yet been breached, but the accounting costs have exceeded the limit. This may encourage more miners to choose to hold Bitcoin rather than sell it now.

As long as cash flow remains positive, miners will continue to mine. At the price level of $88,000, the entire system seems stable, but this premise relies on miners not selling their Bitcoins. Once the price of Bitcoin falls further, or miners are forced to liquidate their positions, they will approach the breakeven line.

Therefore, although the price crash will continue to affect retail and trading groups, it is currently unlikely to harm miners. However, if miners' financing channels become more restricted, the situation may worsen, at which point the growth flywheel will break, and miners will have to increase their investments in auxiliary businesses to maintain operations.