Bitcoin Mining 2024: Rising Costs, Sustainability Wins & New Market Pressures

Bitcoin Mining: Costs, Sustainability, and Market Developments

Comprehensive Insights into Bitcoin Mining Costs and Sustainability

A recent report by the Cambridge Centre for Alternative Finance (CCAF) at the University of Cambridge, as highlighted by MoneyToday, provides detailed insights into the operational structures, hardware efficiency, electricity consumption, and environmental impact of the Bitcoin mining industry. The study surveyed 49 digital mining companies, representing nearly 48% of the implied Bitcoin network hashrate.

The direct electricity costs for producing one Bitcoin range between 17,417 and 56,606 USD, with a median of 39,189 USD. When considering all-in costs, the range is 21,771 to 60,960 USD, with a median of 48,333 USD. At the time of the survey (June 30, 2024), the Bitcoin price stood at 62,763 USD. This results in a profit margin of 37.6% based on direct electricity costs and 23.0% based on all-in costs. Notably, electricity accounts for over 80% of operational expenses, making access to cheap energy a critical factor for mining companies.

Cost Type	Range (USD)	Median (USD)
Direct Electricity Cost per Bitcoin	17,417 – 56,606	39,189
All-in Cost per Bitcoin	21,771 – 60,960	48,333
Bitcoin Price (June 30, 2024)	62,763
Profit Margin (Electricity Only)	37.6%
Profit Margin (All-in)	23.0%

The annual electricity consumption of the Bitcoin network reached 138.2 TWh as of June 30, 2024, marking a 17% year-on-year increase. This represents approximately 0.54% of global annual electricity consumption.

The energy mix for Bitcoin mining is now 52.4% from sustainable sources, with the breakdown as follows:

23.4% Hydropower
15.4% Wind
9.8% Nuclear
3.2% Solar
0.5% Other renewables

Fossil energy sources account for 47.6%, with 38.2% from natural gas, 8.9% from coal, and 0.5% from oil.

"The share of green and renewable energy sources has increased significantly in recent years and will continue to grow. Mining companies are increasingly producing green electricity themselves and providing temporary surpluses to others." – MoneyToday

Mining companies also play a role in grid stability by quickly responding to irregularities due to their high electricity consumption.

Electricity is the largest cost factor in Bitcoin mining.
Over half of the energy used is now from sustainable sources.
Technological advancements are helping to reduce costs and improve margins.

Source: MoneyToday

Key Takeaway: Bitcoin mining is becoming more sustainable, with over half of the energy used coming from renewable sources, and electricity costs dominating operational expenses.

Shift Towards Sustainable Energy in Bitcoin Mining

According to Cointelegraph, the University of Cambridge study confirms that 52.4% of global Bitcoin mining now relies on renewable or low-carbon energy, a significant increase from 37.6% in 2022. The energy mix has shifted, with hydropower at 23.4%, wind at 15.4%, nuclear at 9.8%, and solar at 3.2%. The use of coal has dropped from 36.6% in 2022 to 8.9% in 2024, while natural gas usage has risen to 38.2%.

North America, especially the USA, leads in the transition to sustainable mining, accounting for over 80% of sustainable mining activities. This is driven by investments in renewables and access to affordable, clean energy.

The growing use of sustainable energy could influence companies previously concerned about the environmental impact of cryptocurrencies. For example, Tesla CEO Elon Musk had stated in 2021 that Bitcoin payments would resume once at least 50% of mining used renewable energy—a threshold now surpassed, though Tesla has not yet officially responded.

Renewable energy share in Bitcoin mining increased from 37.6% (2022) to 52.4% (2024).
Coal usage in mining dropped from 36.6% to 8.9%.
North America is the leading region for sustainable mining.

Source: Cointelegraph

Key Takeaway: The Bitcoin mining industry is rapidly adopting sustainable energy, with a notable reduction in coal usage and a strong regional focus in North America.

Rising Costs and Regulatory Challenges for Bitcoin Miners

As reported by Telepolis, despite record Bitcoin prices in Q1 2025, many mining companies are facing financial difficulties due to rising electricity and hardware costs. Seven out of the eight largest publicly traded mining firms in the US are expected to report losses, according to Bloomberg.

The mining difficulty has reached record highs, intensifying competition. According to Coinshares, large mining farms now need to spend 82,000 USD to mine a single Bitcoin—almost 50% more than in autumn. For small companies in Germany and individual miners, the cost can be as high as 200,000 USD per Bitcoin, making it unprofitable given a Bitcoin price of around 95,000 USD.

Entity	Cost per Bitcoin (USD)	Bitcoin Price (USD)
Large Mining Farms	82,000	95,000
Small Companies/Individuals (Germany)	200,000	95,000

Additional challenges include tariffs on mining hardware, primarily imported from Asia, imposed by the Trump administration. Ethan Vera, CEO of Luxor Technology, warns that further increases in tariffs could negatively impact profitability and growth prospects. Rising electricity prices in some US states further strain mining operations, prompting some companies to invest in their own power plants, which requires additional capital.

Financing is also becoming more difficult, with companies increasingly turning to loans and bonds instead of issuing new shares. The recent "halving" in April 2024, which reduced mining rewards, has further impacted revenues. Riot Platforms, for example, reported a loss of nearly 300 million USD from January to March, compared to a profit of 211 million USD a year earlier.

Mining costs have surged, especially for small operators.
Tariffs and rising energy prices are major concerns.
Financing is shifting from equity to debt due to market conditions.
The latest halving has significantly reduced mining rewards.

Source: Telepolis

Key Takeaway: The Bitcoin mining sector faces mounting financial and regulatory pressures, with high costs threatening the viability of smaller operators and increasing market concentration.

CleanSpark: Resilience Amid Industry Challenges

According to Börse Express, CleanSpark, a US-based Bitcoin miner, has shown remarkable resilience in a challenging market. Over the past 30 days, the company's stock has gained over 20%, outperforming the broader financial sector and the S&P 500. The stock has rebounded above its 50-day average after hitting a 52-week low of 6.72 USD in March.

Investors are closely watching the upcoming quarterly results on May 8. Revenue is projected at 197 million USD, a 76% increase year-over-year, though earnings per share are expected to drop by nearly 77%. CleanSpark is working to double its mining capacity to 50 EH/s by mid-year compared to the previous year.

Analyst opinions are divided, with price targets ranging from 12 USD to 27 USD. The stock currently holds a "Hold" rating, reflecting uncertainty about its future trajectory amid the halving and rising energy costs.

CleanSpark stock up over 20% in 30 days.
Revenue expected to rise 76% year-over-year to 197 million USD.
Mining capacity targeted to reach 50 EH/s by mid-year.
Analyst price targets range from 12 to 27 USD.

Source: Börse Express

Key Takeaway: CleanSpark demonstrates strong growth and resilience, but faces uncertainty due to industry-wide challenges and mixed analyst expectations.

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