Latest / The Cryptocurrency Economy with Fexingo: Bitcoin, Ethereum, and Digital Money Markets / The Real Cost of Mining One Bitcoin in 2026
Transcript
- Lucas: So, Bitcoin is sitting just above $75,000 this morning, down a bit over the past week, but the hash rate — the total computing power securing the network — hit a new all-time high last week. And that got me thinking about something we haven't talked about yet: what does it actually cost to mine one Bitcoin in 2026? Luna: Right, because the halving in 2024 cut the block reward in half, so miners are earning half as many Bitcoin for the same work. Lucas: Exactly. That halving, combined with rising energy prices — especially in places like Texas and Kazakhstan — has really squeezed margins. I've been looking at the latest earnings reports from the big public miners, and the numbers are pretty stark. Luna: What kind of cost are we talking? Give me a ballpark. Lucas: Well, it varies hugely by operation. But according to the most recent filings, the all-in cost to mine one Bitcoin for the most efficient public miners — companies like Marathon Digital and Riot Platforms — is somewhere between $40,000 and $50,000. That includes electricity, hardware depreciation, labor, and facility costs. Luna: So at $75,000, they're still profitable, but the margin is maybe 40 percent instead of the 80 or 90 percent they saw when Bitcoin was at $60,000 and costs were lower. Lucas: Right. And the less efficient miners — the ones with older ASICs or higher power contracts — they're probably at $60,000 or even $70,000 per coin. That's dangerously close to the current price. Luna: So we're seeing a consolidation wave, aren't we? The smaller players get squeezed out, and the big guys with cheap power and efficient rigs survive. Lucas: Absolutely. There's been a lot of M&A activity in the mining space over the past year. The companies that locked in long-term power purchase agreements — ideally with renewable or stranded energy assets — are the ones that are weathering this. Some have even started to vertically integrate: they own their own power generation or they're using flare gas from oil wells. Luna: That's the stranded natural gas play, right? Where miners set up containers right at an oil well and use the gas that would otherwise be flared. Lucas: Exactly. It's a fascinating intersection of crypto and energy markets. Some of those operations can get electricity for effectively zero cost — sometimes they're even paid to take the gas off the driller's hands. That puts their cost per Bitcoin at maybe $15,000 or $20,000. Luna: That's a huge advantage. But that's a relatively small slice of the total hash rate, right? Most miners are still on the grid. Lucas: Correct. The majority of mining — probably 70 to 80 percent — is grid-connected, and those miners are paying anywhere from three to eight cents per kilowatt-hour. With the latest generation of ASICs, like the Antminer S21, you need about 30 to 40 megawatt-hours of electricity to mine one Bitcoin. Luna: So let's do the math. At five cents per kilowatt-hour, that's $1,500 to $2,000 per coin just for electricity. But you also have the cost of the hardware itself — those machines are expensive. Lucas: Yeah, and that's the other big factor. The latest ASICs cost around $3,000 to $5,000 per unit. And they depreciate fast — maybe a two-year useful life before they're obsolete. So you've got to amortize that capital cost over the Bitcoin you mine. That adds another $10,000 to $15,000 per coin depending on how efficiently you deploy them. Luna: So the all-in cost really does land in that $40,000 to $50,000 range for a well-run operation. What about the smaller guys who might have bought older rigs secondhand? Lucas: They're in a tough spot. Older generation machines, like the S19, are maybe half as efficient. Their electricity cost alone could be $4,000 to $5,000 per coin, and they produce less Bitcoin per terahash. So their all-in might be $70,000 or more. At these prices, they're barely breaking even, or they're operating at a loss. Luna: And that's assuming Bitcoin doesn't drop. If we see a correction to $60,000, a lot of those miners would be underwater. Lucas: Exactly. And that's why the hash rate can be a lagging indicator. Even though it's at an all-time high, that doesn't mean everyone is profitable. It just means the most efficient operators are adding capacity faster than the inefficient ones are shutting down. Luna: So the hash rate growth we're seeing is really a story of industrial-scale mining getting more efficient, not necessarily a sign of a healthy mining ecosystem. Lucas: Right. And I think this has implications for Bitcoin's price floor in a way. Some analysts argue that the marginal cost of production — roughly the cost of the least efficient miner — acts as a kind of support level. In previous cycles, Bitcoin has rarely traded below the cost of production for sustained periods. Luna: Right, because if price falls below cost, miners shut off, hash rate drops, difficulty adjusts downward, and the cost per coin drops for the remaining miners. So the cost floor moves with the market. Lucas: Exactly. It's a dynamic equilibrium. And right now, with the marginal cost maybe around $60,000 to $65,000, there's a cushion. But if energy prices spike — say, another surge in natural gas prices — that floor could rise. Luna: And we're also seeing some miners pivot to AI compute. I've read about outfits like Hut 8 and Hive repurposing their GPUs for machine learning. Lucas: That's a really interesting development. Some miners have facilities with cheap power and existing infrastructure for high-density computing. Instead of just mining Bitcoin, they're offering compute as a service to AI startups. That could be a way to diversify revenue and smooth out the Bitcoin price volatility. Luna: But then you're no longer a pure-play Bitcoin miner. You're more of a data center operator. That changes the investment thesis. Lucas: Exactly. And the market is starting to price that in. Some mining stocks now trade at a premium because of their AI exposure. But for the pure-play miners, the stock price is highly correlated with Bitcoin, but also with energy costs. It's a double whammy. Luna: Let's wrap up with a concrete takeaway. If someone wants to understand the health of the Bitcoin mining industry, what's the one number they should look at besides Bitcoin's price? Lucas: I'd say look at the network's total hash rate and the average electricity price in the top mining regions. If hash rate keeps rising while energy prices are flat or falling, that means the industry is healthy. But if hash rate is rising because of massive new deployments by a few players, while smaller miners are shutting down, that's a sign of centralization — and that's a different story for Bitcoin's resilience. Luna: So the next time someone says 'Bitcoin mining is bad for the environment', the real conversation should be about where the energy comes from and who controls the hash rate. Lucas: Exactly. And that's what we'll keep an eye on. Thanks, Luna. Luna: Thanks, Lucas. See you next time.