Miner Weekly: These Bitcoin Mining Machines Are on Brink of Loss
This article first appeared in Miner Weekly, BlocksBridge Consulting’s weekly newsletter curating the latest news in bitcoin mining and data analysis from TheEnergyMag. Subscribe to receive in your inbox once a week.
The bitcoin mining sector is facing turbulent waters as declining profitability pushes some hardware models, including industry staples like Bitmain’s Antminer S19 Pro series, to the brink of operating at a loss.
Following a record-setting difficulty adjustment last week and bitcoin’s market price dip below $96,000, bitcoin’s mining hashprice—a measure of revenue per unit of computational power—has plummeted to $53 per petahash per second (PH/s) again. This drop raises concerns about the viability of older-generation mining equipment in an increasingly competitive market.
The Antminer S19 Pro, once a flagship model known for its balance of efficiency and power (110 TH/s at 3,250W), now struggles to remain profitable in regions with above-average electricity or hosting costs.
At a hashprice of $53 per PH/s, an S19 Pro generates only $0.076 per kilowatt-hour (kWH) in revenue. Operators with electricity or hosting fees higher than that are mining at a gross loss. This calculation excludes additional expenses such as cooling, maintenance, and pool fees, which can further erode margins. For miners in regions with higher energy costs or aging infrastructure, the S19 Pro is quickly becoming a liability.
Even the more efficient Antminer S19XP isn’t entirely immune to the recent profitability squeeze. Bitmain has been marketing its energized S19XP Hydro Antminers, which boast an efficiency of 20.8 Joules per TH/s (or J/TH), to potential buyers for $9 per TH/s. Customers pay Bitmain a $0.01 per kilowatt-hour hosting fee in exchange for immediate mining payouts. However, at a hashprice of $53 per PH/s, the S19XP Hydro generates just $0.106 per kWH in revenue, leaving buyers with a negligible gross profit of less than one cent per kWH.
Cango, a Chinese auto-financing platform that recently became the third-largest public bitcoin mining company by production, is believed to have purchased 32 EH/s worth of S19XP units from Bitmain last year. However, details about Cango’s hosting costs remain unclear, as the company has not filed a report for the last quarter.
Coin Metrics estimates that the S19 series accounts for approximately 60% of the entire Bitcoin network’s hashrate as of January. Recent network data suggests some miner operators have capitulated, as the average bitcoin block interval since the last difficulty adjustment has extended to 10 minutes and 23 seconds—about 3.5% longer than the intended 10-minute interval. This extension reflects a decline in global network hashing power.
The silver lining is that the next difficulty retargeting, currently estimated for February 23, could ease competition again, giving miners some much-needed breathing room. Hopefully, the hashrate growth will continue to slow down as previously estimated.
Hardware and Infrastructure News
- Bitcoin Miner Bit Digital (NASDAQ: BTBT) Rebrands HPC Unit as WhiteFiber – TheEnergyMag
- Bitcoin Hashprice Nears One-Month Low Amid Record Difficulty – TheEnergyMag
- Digihost Repurposes Alabama Bitcoin Mine for HPC and AI Hosting – TheEnergyMag
- Solo Bitcoin Miner Beats the Odds, Scoring $310K BTC Reward – Decrypt
- CBP ramps up ASIC miner crackdown with seizures, new import holds – Blockspace
- Iris Energy Reports 38% Drop in Bitcoin Hashcost; Acquired 19 EH/s for $411M – TheEnergyMag
Corporate News
- CleanSpark Cuts Bitcoin Mining Hashcost by 25% in Q4 to Manage Hashprice Pressure – TheEnergyMag
- Tencent Indirectly Exposed to Bitcoin via 15.6% Stake in Cango’s Mining Pivot – TheEnergyMag
- Riot Appoints Former Hut 8 (NASDAQ: HUT) CEO to Board Amid HPC Exploration – TheEnergyMag
- Celsius Mining Spinoff Stockholders Sue For Board Docs – Law360
Financial News
- Digihost Closes Over-Subscribed Private Placement with $6.6 Million – Link
- Bitcoin Miners and Other Public Crypto Firms Are Beating the Market: JP Morgan – Decrypt
- Applied Digital Secures $375M Loan to Fund HPC Expansion in North Dakota – TheEnergyMag
- Bitmain Sold Half of Its Stake in Core Scientific (NASDAQ: CORZ) Amid 2024 Stock Rally – TheEnergyMag
Feature
- Mining For The Streets With Bitaxe – The Mining Pod
- Blast Exposes Illegal Bitcoin Mining Setup in Malaysia – Decrypt
