Mining Industry Recap, Episode 8

Network Overview

This week the Bitcoin network hash rate reached a new peak at almost 800 EH/s, but came down towards the end of the week again and ended the week below last week's level. As a consequence of the high hash rate, mining difficulty grew quite significantly, and is not sitting at an all time high. This, combined with Bitcoin prices has negatively impacted profitability for miners.

Indeed, daily mining revenue has fallen by more than 10% this week, down to $34.24 million. Mempool size reflects lower transaction congestion, which could be part of the reason why transaction fees have dropped. Nevertheless, they remain much higher than the average of the last few months. Meanwhile transaction value remained relatively stable this week.

Solo Bitcoin Miner Hits the Jackpot, Earning $222K in Rewards

In an impressive feat, a solo Bitcoin miner successfully processed a block on the network, earning 3.329 BTC in total rewards—equivalent to $222,438. This reward combines the fixed 3.125 BTC block reward and transaction fees accumulated within the block, which contained 3,285 transactions. Such solo achievements are rare, as mining has become highly competitive and energy-intensive, typically dominated by large-scale operations running out of dedicated warehouses.

The April 2024 Bitcoin halving event doubled the challenge for miners by reducing the block reward from 6.25 BTC to 3.125 BTC. Despite the reduced rewards, occasional solo wins continue to demonstrate that individual miners can still occasionally solve blocks, even in a competitive landscape where mining is generally dominated by companies with extensive resources. Solo miners have seen luck strike multiple times this year, making substantial earnings in April, July, August, and September.

Source: decrypt.co

TeraWulf to Raise $350M Through Convertible Notes for Share Buyback

Bitcoin mining company TeraWulf has announced plans to raise $350 million by offering convertible senior notes, which will help fund a $200 million share repurchase program. The notes, set to mature on February 1, 2030, include an option for initial purchasers to buy an additional $75 million within 13 days of issuance. This buyback program, authorized by TeraWulf’s board of directors, is seen as a vote of confidence in the company’s business strategy and financial position. The firm also plans to use the raised capital for corporate expenses and organic growth initiatives, including potential site acquisitions and expanding operations in high-performance computing (HPC) and AI.

This move follows TeraWulf’s recent sale of its 25% equity interest in the Nautilus facility for $92 million. Despite recent challenges faced by the mining industry due to Bitcoin’s post-halving revenue drop, TeraWulf remains one of the leading public Bitcoin miners, producing 176 BTC in September. TeraWulf’s stock has surged 178.26% year-to-date, evidence of strong investor confidence.

Source: theblock.co

Bitcoin Mining Difficulty Hits All-Time High, Heralding Potential Bull Run

Bitcoin's mining difficulty reached a new peak of 95.67 terahashes (T), marking a 3.9% increase, according to Glassnode data. Mining difficulty, which adjusts approximately every two weeks, reflects the effort required to mine new blocks on the Bitcoin network. This adjustment aims to keep block times consistent at around 10 minutes. Since the start of 2024, difficulty has climbed 27%, driven by rising network hashrate, which recently crossed an unprecedented 700 exahashes per second (EH/s). As difficulty and operational costs increase, less efficient miners are being pushed out, leading to industry consolidation. Over 30,000 BTC left miner wallets between November 2023 and July 2024 as smaller miners had to cash out in order to sort out their finances.

This increase in mining difficulty coincides with growing mining revenue, which has risen above $35 million per day on a 7-day moving average, up by $10 million since September. Glassnode data suggests that when miner revenue surpasses the 365-day moving average, it has historically signaled the beginning of a Bitcoin bull run. With miner balances stabilizing and stronger players consolidating their positions, the industry appears poised for accelerated growth.

Source: coindesk.com

BitFuFu Expands to Ethiopia to Mitigate Rising Bitcoin Production Costs

Amid soaring operational costs, Wall Street-listed Bitcoin miner BitFuFu (NASDAQ: FUFU) is making a strategic move into Ethiopia by acquiring an 80-megawatt Bitcoin mining facility. This East African expansion aims to offset a 170% surge in the company’s production expenses over the past year, which slashed its net profit by 75%. With energy costs in Ethiopia averaging below $0.04 per kilowatt-hour, the new site is expected to significantly reduce BitFuFu's overall Bitcoin production costs. When fully equipped with the latest Bitmain S21-series miners, the facility is projected to add 4.6 EH/s to the company’s mining capacity.

This acquisition aligns with BitFuFu’s broader strategy to enhance profitability through cost-effective energy sourcing and technological upgrades. CEO Leo Lu emphasized that this move strengthens BitFuFu's global competitive position and enables the company to innovate in energy-efficient mining. The shift towards direct ownership of mining facilities marks a pivot from BitFuFu’s prior asset-light model, which relied on third-party hosting. As mining costs and industry challenges continue to rise, companies like BitFuFu are also exploring diversification into AI and high-performance computing to stabilize revenues and deliver long-term shareholder value.

Source: financemagnates.com

USB Bitcoin Miners: Affordable Entry, But No Profits

USB Bitcoin miners, often called "stickminers," offer a beginner-friendly and inexpensive way to experience Bitcoin mining. Unlike traditional mining rigs, which are large, power-intensive, and costly, USB miners like the GekkoScience Compac F and NanoFury 2 are compact and require minimal power. They’re perfect for those interested in understanding the basics of mining without a big upfront investment. However, their low hashrate and efficiency mean they yield minimal Bitcoin—making them more of a hobby tool than a profit generator.

While USB miners are a great way to learn, they aren't a viable option for those looking to make serious returns. Even the most powerful USB miner, the GekkoScience Compac A1, only mines about $8.70 worth of Bitcoin annually at current prices. Given the cost of the devices and operational expenses, it would take decades to break even. For real profits, traditional ASIC miners or cloud mining options remain the more effective choice.

Source: coincodex.com

3 Key Drivers Behind Bitcoin's Surging Hashrate

The Bitcoin (BTC) hashrate recently achieved an all-time high, surpassing 925 EH/s, driven by a combination of factors that support its growth and sustainability. First, Bitcoin’s profitability remains a key incentive. Despite the halving reducing block rewards, miners are compensating through transaction fees and a steady hashprice, which even briefly rose above $50 per PH/s. With projections of Bitcoin’s price continuing to rise, profitable mining could endure, encouraging miners to keep their machines operational, thus boosting the hashrate further.

Second, the industry is witnessing "natural selection" among miners. High operating costs and market volatility often push less financially stable miners out of business. This consolidation allows remaining miners to secure a larger share of the network, leading them to invest in additional machines and infrastructure. Finally, diversification into AI services provides another revenue stream. Major players like Marathon Digital are establishing AI data centers alongside mining, making their operations more resilient and increasing hashrate stability. These strategic moves demonstrate the adaptability of modern mining operations, setting the stage for continued growth in the BTC hashrate.

Source: coingape.com

Bitcoin Voter PAC: BTC Miners Rally Behind Pro-Crypto Candidates

A group of Bitcoin miners, including Riot Platforms, CleanSpark, and Mara Holdings, has joined forces to support the Bitcoin Voter PAC, a political action committee focused on electing pro-crypto candidates in the upcoming 2024 U.S. elections. The PAC’s website features promotional videos endorsing candidates like Donald Trump and Senator Ted Cruz, both of whom are vocal supporters of the cryptocurrency industry. The organization advocates for “financial freedom” and aims to protect U.S. innovation in the digital currency sector, emphasizing a regulatory environment that supports, rather than restricts, crypto growth.

The PAC’s push comes at a time when crypto firms are increasing financial support for pro-crypto candidates amid ongoing regulatory challenges with agencies like the SEC. Since campaign season began, cryptocurrency businesses and stakeholders have contributed over $190 million, including $10 million from the Winklevoss twins. The Bitcoin Voter PAC hopes to secure a favourable political landscape for crypto by backing candidates who prioritize decentralized finance and sound monetary policies that limit government intervention.

Source: cryptopolitan.com

Bitcoin Miners Aim for $100 Hashprice as Market Dynamics Shift

As Bitcoin’s price fluctuates between $61,200 and $68,500, miners face new profitability challenges following the April halving, which cut block rewards from 6.25 BTC to 3.125 BTC. Currently, hashprices—representing estimated daily earnings per petahash—have risen from August’s low of $37 per PH/s to approximately $47.88, but miners still need a BTC price surge to restore hashprices above $100 per PH/s. Based on stable difficulty, transaction fees, and equipment efficiency, Bitcoin would need to reach between $135,500 and $171,000 to reach those levels. However, real-world variables, including on-chain fees and mining difficulty, are constantly shifting, impacting miners' revenue.

Mining efficiency advancements from leading manufacturers like Bitmain and MicroBT further complicate projections, as newer models provide improved joules per terahash efficiency and higher hashrates. These developments enable miners to maximize returns, but steady price increases remain essential in order to sustain high hashprices.

Source: Bitcoin.com

Core Scientific and the Rising Intersection of Bitcoin Mining and AI Hosting

Bitcoin miner Core Scientific is broadening its AI footprint through a major partnership with cloud-computing firm CoreWeave. The two firms plan to develop 500 megawatts of AI infrastructure over the next 12 years, an endeavour projected to bring in $8.6 billion in revenue. While this shift may seem like a response to lower post-halving mining profits, Core Scientific’s AI involvement dates back to 2019. By building application-specific data centres with GPUs for both Bitcoin and AI applications, Core Scientific has long been positioned in the AI sector.

Unlike Bitcoin mining, which can tolerate periodic power fluctuations, AI hosting requires constant uptime and robust cooling solutions, adding operational complexity and expenses. This strategic alignment with CoreWeave capitalizes on Core Scientific’s background in data centre management, enabling it to quickly scale operations and meet AI’s growing demand for processing power.

This evolution reflects a broader trend as Bitcoin miners increasingly leverage their infrastructure for AI and high-performance computing (HPC) services. Both industries share similar needs for computational power, energy access, and strategic location—making diversification into AI a natural fit, especially after April’s halving event reduced Bitcoin mining rewards. As these sectors intersect, they mark a shift towards more versatile, sustainable uses of high-compute facilities, paving the way for a data-driven future where Bitcoin mining and AI hosting operate side-by-side.

Source: CoinDesk

Source: Bitcoin.com