Bitcoin Mining Costs Increase 150%

BitFuFu, a cloud mining firm associated with Bitmain, has published an unaudited financial and operational report for its Q2 2024 performance, which concluded on June 30.

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

In addition to rising costs, the report shows a significant boost in mining capacity, with an increase of “62.5% to 24.7 EH/s, compared to 15.2 EH/s during the same period of 2023.”

Among the various metrics disclosed by BitFuFu in its Q2 report, the most striking was the average cost to mine each BTC, which has escalated to $51,887.

This sharp increase contrasts with the $19,344 cost per mined BTC during the same period in 2023, attributed to higher electricity and operational expenses.

The price rise is also linked to the April 2024 BTC halving event, which increased mining difficulty while reducing BTC rewards by 50%.

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

With the increase to 24.7 exahashes per second (EH/s), the company has grown its operational capacity by more than 60% amidst rising mining-related expenses.

The firm also reported an almost 70% increase in total revenue, reaching $129.4 million in Q2 2024, up from $76.3 million in the same quarter of 2023.

This revenue growth is attributed to the expansion of the company’s cloud mining services, which generated $77 million during the period.

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

Sigel described the current state of the crypto market and BTC’s price as a “typical seasonal pattern” seen “one to three months” after a halving event.

The forced selling Sigel mentioned included the German government’s sale of 49,858 BTC for $2.6 billion, coinciding with 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