Bitcoin Mining Costs Surge Amid Rising Hashrate and Difficulty

Bitcoin miners are under increasing pressure as network difficulty and hashrate surge, squeezing profitability despite stable BTC prices. According to TheMinerMag's latest report, mining difficulty reached an all-time high of 126.98 trillion, driven by a 14-day average hashrate of 913.54 EH/s. This spike has pushed transaction fees below 1% of block rewards, while hashprice dipped to $52 per PH/s before a modest recovery.

Production costs are climbing rapidly, with average breakeven levels expected to exceed $70,000 per BTC—up from $64,000 in Q1—largely due to rising energy costs and intensified competition. Top public miners like Marathon Digital (MARA), CleanSpark (CLSK), Riot Platforms (RIOT), and IREN (IREN) are ramping up operations to stay competitive. MARA expanded its hashrate by 30% in May, while HIVE Blockchain (HIVE) increased capacity by 32% after launching a facility in Paraguay. Cipher Mining (CIFR) aims for a 70% boost through its Texas expansion.

ASIC prices now range from $10 to $30 per terahash, with payback periods extending up to two years based on $0.06/kWh power rates. However, not all miners can access such favorable rates. For example, Terawulf paid $0.081/kWh in Q1, raising its fleet hashcost by over 25%.

Interestingly, mining stocks are showing mixed performance relative to Bitcoin’s price. Companies like IREN, Core Scientific (CORZ), and Bit Digital (BTBD) posted gains over the past month, while Canaan (CAN) and Bitfarms (BITF) declined by double digits. The divergence signals a market shift, with investors focusing more on miner fundamentals and operational strategies than BTC price alone.

Overall, the mining sector is entering a more selective phase, rewarding efficiency and cost control amid tightening margins.