Bitcoin Mining Companies Benefit from Price Surge
Experts believe that the recent surge in Bitcoin’s price has created a favorable environment for Bitcoin mining companies post-halving. In January, Cantor Fitzgerald estimated the average cost to mine one coin for several publicly traded Bitcoin mining firms after the halving in April. At that time, only two out of 13 firms were profitable. However, with Bitcoin’s current price of $67,000, all analyzed firms, including Marathon Digital, Riot Platforms, and Iris Energy, would be profitable.
In its February Investor Update, Iris Energy reported that its electricity cost per BTC was $20,158. This implies that the company will spend approximately $40,000 to mine coins after the halving. This positive development is encouraging for long-term buyers of mining stocks, as their investments have suffered since the launch of Bitcoin spot ETFs in January.
While Bitcoin equity proxies like MicroStrategy and Coinbase have recovered from the post-launch dip, most miners continue to struggle due to concerns about the halving. CleanSpark is an exception to this trend and has seen a 57% year-to-date increase in its stock price. According to Cantor’s analysis and CleanSpark’s own measures, the company’s mining cost per coin will remain under $37,000 and possibly even lower.
Efficient Mining Companies
According to Anthony Power, CEO of Power Mining Analysis, CleanSpark and Bitdeer are two highly efficient contenders in the mining industry:
- CleanSpark: The company has grown rapidly by utilizing dilution as a strategy. It has increased its mining capacity by 60% year-to-date and has managed to keep its mining costs low.
- Bitdeer: This vertically integrated BTC mining company stands out due to its self-mining fleet, hosting services, cloud-based mining, and ASIC production. Its “cash cost” per Bitcoin mined was calculated to be just $18,319 in the third quarter of 2023.
Power explained that cash costs include all expenses that need to be paid for with cash and exclude depreciation and stock compensation. Cantor’s analysis estimated Bitdeer’s cost per mined coin to be $17,744 post-halving, significantly lower than its competitors.
Conclusion
The significant price surge in Bitcoin has created a positive outlook for Bitcoin mining companies post-halving. With the current price of $67,000, all analyzed firms are expected to be profitable. This development is particularly encouraging for long-term buyers of mining stocks who have seen their investments decline since the launch of Bitcoin spot ETFs. CleanSpark and Bitdeer are two notable players in the industry that have managed to keep their mining costs low and remain competitive.
Hot Take: Bitcoin Mining Companies Thrive Amidst Price Surge
The recent surge in Bitcoin’s price has provided a much-needed boost for Bitcoin mining companies. The increased profitability has created a favorable environment for these companies post-halving. While concerns about the halving continue to plague the industry, the current market conditions offer a glimmer of hope.
Bitcoin’s price surge has allowed previously unprofitable mining firms to become profitable once again. This is particularly beneficial for long-term investors in mining stocks who have suffered losses since the launch of Bitcoin spot ETFs earlier this year.
CleanSpark and Bitdeer are two companies that have stood out in terms of efficiency and profitability:
- CleanSpark has successfully implemented a strategy of rapid growth through dilution. By increasing its mining capacity by 60% year-to-date, the company has managed to keep its mining costs low.
- Bitdeer, on the other hand, has established itself as a vertically integrated BTC mining company. With its self-mining fleet, hosting services, cloud-based mining, and ASIC production, Bitdeer has achieved a remarkably low “cash cost” per Bitcoin mined.
Overall, the recent price surge in Bitcoin has provided a much-needed boost for the mining industry. As Bitcoin continues to gain mainstream acceptance and its price remains high, the future looks promising for Bitcoin mining companies.
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