Bitcoin mining margins hit record lows
Bitcoin miner profitability has dropped to an all-time low as Bitcoin struggles to maintain support above $60,000, raising concerns that miners could increase selling pressure to fund operations and expansion plans.
The estimated daily return for 1 terahash per second of mining power fell to $0.028 on Tuesday from $0.039 a month earlier, while monthly gross profit for an Antminer S21 XP Hydro operating at $0.07 per kilowatt-hour declined to $137 from $192.
“Whether these liquidations are intended to fund ongoing operations, reduce debt leverage, or bankroll expansion into AI data centre computing, the net effect remains a heavy drag on Bitcoin’s price discovery,”
The report said.
Miner and mining pool Bitcoin balances have been declining since early May, with the 14-day average net position change remaining negative as operators increasingly sell holdings or redirect capital toward alternative revenue opportunities.
The shift comes as demand for AI infrastructure continues to rise, with Bernstein analysts arguing that access to electricity has become the key bottleneck for AI data centre growth, prompting some mining companies to repurpose power resources away from cryptocurrency mining.
According to Capriole Investments founder Charles Edwards, Bitcoin’s estimated production cost currently stands at $62,650, while the minimum electricity break-even level is approximately $50,120, although costs vary significantly across operators.
Despite the profitability squeeze, institutional spot Bitcoin demand continues to dwarf miner production, with some large-scale operators reporting substantially lower mining costs, reducing the likelihood that miner economics alone will determine Bitcoin’s direction.
Bitcoin previously traded below estimated production costs for extended periods in both 2019 and 2023, suggesting that broader macroeconomic conditions and investor risk appetite remain more important drivers of price performance than mining profitability in isolation.
At the time of reporting, Bitcoin price was $61,907.40.
