Bitcoin Mining Costs Increase 150%

BitFuFu, a cloud mining company linked to Bitmain, has published an unaudited financial and operational report detailing its Q2 2024 results, which concluded on June 30.

The report highlights a substantial increase in the cost of Bitcoin mining, reflecting the challenges and growth the company has encountered over the past year.

In addition to the rising costs, the report noted a significant boost in mining capacity under management, which grew by 62.5% to 24.7 EH/s, compared to 15.2 EH/s during the same period in 2023.

Among the statistics shared by BitFuFu in its Q2 report, the most notable change was the average cost to mine each Bitcoin, which has soared to $51,887.

This sharp increase is evident when compared to the $19,344 cost per mined BTC in the same period in 2023, a rise that can be attributed to higher electricity and operational expenses.

The increase in costs is also linked to the April 2024 Bitcoin halving event, which intensified mining difficulty while cutting BTC rewards by 50%.

Despite the significant rise in mining costs, BitFuFu has expanded the scale of its mining operations.

With the increase to 24.7 exahashes per second (EH/s), the company boosted its operational capacity by over 60% despite the rising costs associated with mining.

The company also reported a nearly 70% increase in total revenue, reaching $129.4 million in Q2 2024, up from $76.3 million during the same period in 2023.

This revenue growth is largely due to the expansion of its cloud-mining services, which generated $77 million during the quarter.

In an Aug. 19 interview with CNBC, Matthew Sigel, head of digital assets research at VanEck, stated that Bitcoin’s “forced selling [is] behind us.”

Sigel noted that the current state of the crypto market and Bitcoin’s price follows a “typical seasonal pattern” observed “one to three months” post-halving.

The "forced selling" Sigel mentioned included the German government's sale of 49,858 BTC for $2.6 billion, coinciding with the distribution of repayments to Mt. Gox creditors.

Sources:

https://cointelegraph.com/news/bitfufu-q2-2024-financial-report-btc-mining-cost-surge

https://finance.yahoo.com/news/bitfufu-reports-unaudited-second-quarter-110500624.html?guccounter=1