Bitcoin Mining Under Pressure: Rising Costs, Tight Margins & Market Shifts

Bitcoin Mining: Exploding Costs and Shrinking Margins

According to t3n, the costs for Bitcoin mining have recently exploded, making it barely profitable even for large mining farms. Data from Coinshares shows that while large companies had to pay $56,000 to mine one Bitcoin in autumn 2024, the average cost has now risen to $82,000. In the USA, smaller mining firms or individual miners face costs of $137,000 per Bitcoin, and in Germany, the figure is as high as $200,000. With the Bitcoin price rebounding to nearly $95,000 at the end of April 2025, mining is technically still profitable for large farms, but the margin is slim.

The global hashrate reached a record high, surpassing one zetahash per second in early April, and is projected by Coinshares to double to two zetahash per second by early 2027. The mining difficulty also hit a record 123 trillion. These increases signal greater network security but also mean more energy and computing power are required. The situation is exacerbated by the effects of the May 2024 Bitcoin halving, ongoing inflation, and rising energy and hardware costs, partly driven by the AI boom. As a result, smaller miners are being pushed out of the market, and wealth concentration is increasing: according to Bitinfocharts, 1% of Bitcoin wallets hold over 90% of all circulating Bitcoins.

Region/Group Cost per Bitcoin Large Mining Farms (Global) $82,000 Small/Individual Miners (USA) $137,000 Small/Individual Miners (Germany) $200,000

Hashrate: >1 zetahash/sec (April 2025)
Mining Difficulty: 123 trillion (record high)
1% of wallets hold >90% of Bitcoins

Summary: Bitcoin mining is becoming less profitable due to soaring energy and hardware costs, with only large-scale operations remaining viable. The network is more secure, but wealth is increasingly concentrated. (Source: t3n)

Profitability Crisis in Bitcoin Mining

it boltwise reports that the profitability of Bitcoin mining is under severe pressure. CoinShares analysis confirms that the cost of mining a single Bitcoin for large companies now exceeds $82,000, while the current value is about $95,000. This leaves only a small profit margin, which has shrunk significantly from the previous quarter when costs were $56,000—a 47% increase in just a few months.

For smaller operations, the situation is even worse: in the USA, mining costs are $137,000 per Bitcoin, and in Germany, $200,000. These figures are well above the current Bitcoin price, forcing miners to accept losses unless the price rises substantially. The main drivers of these costs are global increases in electricity prices, inflation, trade conflicts, and the rising demand for hardware due to AI. The 2024 Bitcoin halving also reduced mining rewards, further squeezing margins.

The concentration of wealth in the Bitcoin ecosystem is growing: BitInfoCharts data shows that the top 1% of wallet addresses hold more than 90% of all Bitcoins in circulation. The future of mining depends on technological advances that could lower costs, but the current market structure poses significant challenges.

Period Mining Cost (Large Firms) Bitcoin Price Q1 2025 $82,000 $95,000 Q4 2024 $56,000 n/a

Electricity and hardware costs are the main cost drivers
Bitcoin halving reduced mining rewards
Top 1% of wallets hold >90% of Bitcoins

Summary: The profitability of Bitcoin mining is at risk, especially for small operators, due to rising costs and reduced rewards. Wealth concentration is increasing, and only technological innovation may offer relief. (Source: it boltwise)

CleanSpark: Expansion and Record Growth Amid Market Pressure

According to Börse Express, CleanSpark, a US-based Bitcoin miner, has doubled its credit facility with Coinbase to $200 million to fund further expansion. The company is also developing a new institutional Bitcoin treasury desk, signaling a diversification beyond mining. CleanSpark reported a 125% increase in annual revenue to $379 million and an 882% rise in adjusted EBITDA. In March, the company mined 700 BTC, a 13% increase over February, and now holds 11,869 BTC.

Despite these impressive figures, CleanSpark's stock remains volatile, trading more than 50% below its 52-week high, though it has rebounded nearly 30% from its March low. The company was ranked 35th among the fastest-growing US companies by the Financial Times and is expanding in Wyoming, Tennessee, and Georgia. Analysts have set an average price target of $22, nearly triple the current level.

Metric Value Annual Revenue +125% to $379 million Adjusted EBITDA +882% BTC Mined (March) 700 BTC (+13% vs. Feb) BTC Holdings 11,869 BTC Stock Performance -50% from 52-week high, +30% from March low

Summary: CleanSpark is aggressively expanding and reporting record growth, but its stock remains under pressure. The company's future performance will depend on its ability to maintain growth in a competitive market. (Source: Börse Express)

Phoenix Group: Sustainable Bitcoin Mining Expansion in Ethiopia

Newsbit.de reports that Phoenix Group is expanding its Bitcoin mining operations in Ethiopia by adding 52 MW of power, bringing the country's total mining capacity to 132 MW. Globally, Phoenix now operates over 500 MW. The company is committed to using affordable and sustainable energy sources, with the new Ethiopian site powered by renewable hydropower.

The new facility is being built in two phases: Phase 1 uses 5,300 air-cooled mining devices with 20 MW, delivering 1.2 exahash per second. By the end of Q2 2025, Phase 2 will bring the total to 52 MW with water cooling, doubling the computing power to 2.4 exahash per second. Phoenix Group's IPO in Abu Dhabi at the end of 2023 was 33 times oversubscribed, and the stock price rose 50% immediately, now trading at about $7.94. The company is also working with Tether and Green Acorn Investments on a new digital currency pegged to the UAE dirham.

Phase Power (MW) Hashrate (Exahash/sec) Phase 1 20 1.2 Phase 2 52 2.4

Total Ethiopia capacity: 132 MW
Global Phoenix capacity: >500 MW
IPO: 33x oversubscribed, stock up 50%, now ~$7.94

Summary: Phoenix Group is rapidly expanding sustainable Bitcoin mining in Ethiopia, leveraging renewable energy and significant investment. The company is also innovating in digital currency projects. (Source: Newsbit.de)

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