The post Bitcoin mining — Institutions boost investments amid favorable US climate appeared on BitcoinEthereumNews.com. Opinion by: Fakhul Miah, managing director of GoMining Institutional The Bitcoin (BTC) mining industry has never been more attractive to institutional investors. Fintech giants are investing in Bitcoin mining rather than just accumulating the asset, all thanks to the favorable regulatory environment in the US and the profitability margin of BTC.  Then, numerous companies are diversifying by allocating computing power to AI, further strengthening their economics and, thus, investment attractiveness. For now, it looks like the future of the foundational layer for the Bitcoin network could mark the new gusher age. Is Bitcoin mining profitable? Bitcoin mining is still profitable. CoinShares, a digital asset investment firm, shared that the average cost to mine 1 BTC for US-listed miners reached $55,950 in Q3 2024. Two other popular models — one from MacroMicro and another dubbed the Glassnode Difficulty Regression Model — give different estimates.  On the very same day of Feb. 20, MacroMicro.me data shows that the average cost to produce 1 BTC hovers above $92,000; Glassnode’s Difficulty Regression Model estimates the cost to mine a single BTC at approximately $34,400, all while the cryptocurrency’s price hit $98,300 on that day. On a global scale, mining costs differ based on the region. For example, the electricity cost to produce 1 BTC in Ireland is roughly $321,000, but it costs just over $1,300 to mine 1 BTC in Iran. Electricity is only part of the equation — hardware, labor and maintenance costs also play a crucial role. Recent data from CoinShares and MacroMicro.me paints a challenging yet nuanced picture for Bitcoin miners in the United States. While some institutional miners remain profitable, the broader landscape reveals increasing operational pressures that could reshape the mining industry. What happens if the challenges aren’t addressed? Mining institutions with high profitability rates could start to expand… The post Bitcoin mining — Institutions boost investments amid favorable US climate appeared on BitcoinEthereumNews.com. Opinion by: Fakhul Miah, managing director of GoMining Institutional The Bitcoin (BTC) mining industry has never been more attractive to institutional investors. Fintech giants are investing in Bitcoin mining rather than just accumulating the asset, all thanks to the favorable regulatory environment in the US and the profitability margin of BTC.  Then, numerous companies are diversifying by allocating computing power to AI, further strengthening their economics and, thus, investment attractiveness. For now, it looks like the future of the foundational layer for the Bitcoin network could mark the new gusher age. Is Bitcoin mining profitable? Bitcoin mining is still profitable. CoinShares, a digital asset investment firm, shared that the average cost to mine 1 BTC for US-listed miners reached $55,950 in Q3 2024. Two other popular models — one from MacroMicro and another dubbed the Glassnode Difficulty Regression Model — give different estimates.  On the very same day of Feb. 20, MacroMicro.me data shows that the average cost to produce 1 BTC hovers above $92,000; Glassnode’s Difficulty Regression Model estimates the cost to mine a single BTC at approximately $34,400, all while the cryptocurrency’s price hit $98,300 on that day. On a global scale, mining costs differ based on the region. For example, the electricity cost to produce 1 BTC in Ireland is roughly $321,000, but it costs just over $1,300 to mine 1 BTC in Iran. Electricity is only part of the equation — hardware, labor and maintenance costs also play a crucial role. Recent data from CoinShares and MacroMicro.me paints a challenging yet nuanced picture for Bitcoin miners in the United States. While some institutional miners remain profitable, the broader landscape reveals increasing operational pressures that could reshape the mining industry. What happens if the challenges aren’t addressed? Mining institutions with high profitability rates could start to expand…

Bitcoin mining — Institutions boost investments amid favorable US climate

2025/05/04 06:48

Opinion by: Fakhul Miah, managing director of GoMining Institutional

The Bitcoin (BTC) mining industry has never been more attractive to institutional investors. Fintech giants are investing in Bitcoin mining rather than just accumulating the asset, all thanks to the favorable regulatory environment in the US and the profitability margin of BTC. 

Then, numerous companies are diversifying by allocating computing power to AI, further strengthening their economics and, thus, investment attractiveness. For now, it looks like the future of the foundational layer for the Bitcoin network could mark the new gusher age.

Is Bitcoin mining profitable?

Bitcoin mining is still profitable. CoinShares, a digital asset investment firm, shared that the average cost to mine 1 BTC for US-listed miners reached $55,950 in Q3 2024. Two other popular models — one from MacroMicro and another dubbed the Glassnode Difficulty Regression Model — give different estimates. 

On the very same day of Feb. 20, MacroMicro.me data shows that the average cost to produce 1 BTC hovers above $92,000; Glassnode’s Difficulty Regression Model estimates the cost to mine a single BTC at approximately $34,400, all while the cryptocurrency’s price hit $98,300 on that day.

On a global scale, mining costs differ based on the region. For example, the electricity cost to produce 1 BTC in Ireland is roughly $321,000, but it costs just over $1,300 to mine 1 BTC in Iran. Electricity is only part of the equation — hardware, labor and maintenance costs also play a crucial role.

Recent data from CoinShares and MacroMicro.me paints a challenging yet nuanced picture for Bitcoin miners in the United States. While some institutional miners remain profitable, the broader landscape reveals increasing operational pressures that could reshape the mining industry.

What happens if the challenges aren’t addressed? Mining institutions with high profitability rates could start to expand their operations and possibly acquire struggling miners at bargain prices, potentially putting retail and smaller miners at risk.

Sustainable economics for investment attractiveness

In addition to receiving the block rewards, miners also benefit from the Bitcoin network’s transaction fees, which depend on network usage. Data shows that the daily Bitcoin transaction fees have been hovering between $360,000 and $1.3 million over the past month — reaching an average of $595,000 daily. 

This additional revenue stream bolsters Bitcoin mining’s economic appeal and strengthens the resilience of the mining business model by diversifying income sources.

Recent: Bitcoin miner Bitfarms secures up to $300M loan from Macquarie

It’s not only mining that mining hardware is used for. High computational power, captive power supplies and ready-made infrastructure make miners uniquely equipped to support AI and high-performance computing. In simple terms, mining firms can now rent out their hardware to process AI tasks instead of only focusing on mining Bitcoin.

The combination of transaction fee revenue growth and AI computing diversification creates a more resilient and profitable industry model (the existing one has never been quite appealing to institutional investments in the US). 

Institutional investments on the rise

The appealing revenues in the Bitcoin mining industries brought huge attention from institutional investors. This process is easy to spot: Bitcoin mining pools in the US accounted for over 40% of the global Bitcoin network’s hashrate in 2024. 

According to research by EY-Parthenon and Coinbase, 83% of the 352 global institutions plan to increase their crypto allocations this year, while 51% of the asset managers are considering investments in digital asset companies, including mining companies. That’s why I’m not surprised to witness huge investments in Riot Platforms, CoreWeave and other mining industry players. 

The favorable market sentiment has paved the way for more initial public offerings (IPOs) and specialized funds targeting mining companies. In addition to securing the $650-million investment, CoreWeave aims to go public with a $4-billion IPO to help the Nvidia-backed company reach a $35-billion valuation.

Bgin Blockchain, a Singapore-based crypto miner manufacturer, recently filed to go public in the US. Renaissance Capital, an investment advisory firm, expects Bgin Blockchain to raise $50 million for its IPO.

This surge in institutional momentum is set to benefit the Bitcoin mining industry by driving up demand and tightening available supply on the market. As more large players accumulate and hold Bitcoin, market scarcity could increase, supporting higher prices and, in turn, boosting miner profitability.

The future optimism is more than tangible

The strong support from institutional investors comes as the optimism around crypto-friendly policies has significantly increased after Donald Trump won the US presidential elections in November 2024.

Establishing a Strategic Bitcoin Reserve in early March, seen as a massive policy shift, triggered positivity in the crypto and mining sectors. This sector gained importance. Last year, Bitcoin mining operations significantly contributed to the US economy, generating roughly $4.1 billion in gross domestic product and creating over 31,000 jobs nationwide. The industry is also revitalizing rural areas by generating tax revenue and repurposing remote locations for mining operations. It sounds like the gusher days of the oil industry a century ago, doesn’t it?

The latest investments, leadership appointments and IPOs show that Bitcoin mining firms have a significant tailwind. Meanwhile, they are no longer just about BTC — they are becoming data infrastructure providers for the AI sector, turning into hybrid data processing giants.

Taking advantage of this shift, the US could potentially become the leader in the digital asset and Bitcoin mining space due to the pro-crypto stance of the Trump administration and fulfill its stated goal of being the “crypto capital of the world.”

As institutions double down on Bitcoin mining and AI convergence, the question isn’t if this industry will evolve but who will lead the charge. The modern digital gold rush is underway, and the smartest capital is already claiming it.

Opinion by: Fakhul Miah, managing director of GoMining Institutional.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Source: https://cointelegraph.com/news/bitcoin-mining-institutions-boost-investments?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound

Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.
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