Bitcoin Mining Costs Surge 35% to $70,000 in Q2 2025

The median cost of mining a single Bitcoin has surged above $70,000 in the second quarter of 2025, driven by an increase in network hashrate and energy prices. This marks a significant rise from $52,000 in the last quarter of 2024 to $64,000 in the first quarter of 2025, with an expected increase of over 9% in the current quarter. The rising production costs are putting pressure on less efficient miners, as their profit margins shrink. Despite this, most miners still have a sufficient buffer with Bitcoin trading at around $107,635. However, the production cost estimates do not include the depreciating value of mining rigs and other factors.

Public companies have been focusing on keeping their operations efficient, particularly their fleet hashcost, which is the cost of computing power to mine Bitcoin. In the first quarter of 2025, the median fleet hashcost from public miners held steady at approximately $34 per petahash per second (PH/s). However, some firms, including Terawulf and Bitdeer, saw production costs rise by over 25%. Terawulf attributed the increase to rising energy costs, which spiked to $0.081 per kilowatt-hour (kWh) in the first quarter, nearly double the $0.041 per kWh reported in the first quarter of 2024.

Bitcoin mining difficulty has recently experienced a slight decline, dropping to approximately 126.4 trillion after reaching a record high of 126.9 trillion on May 31. This minor adjustment comes amidst increasing financial pressures on miners due to reduced block rewards following the April 2024 halving, rising energy costs, and sustained high network hashrate. These combined factors are intensifying competition and production costs, testing the profitability and resilience of mining operations.

Despite these challenges, leading miners like Marathon Digital and CleanSpark are not only managing to stay afloat but are also expanding their operations and adopting a new strategy of holding onto their mined Bitcoin instead of selling it. This shift suggests a long-term confidence in Bitcoin’s value. Marathon Digital Holdings, for instance, boosted its Bitcoin output by 35% in May, mining 950 BTC during a month marked by record hashrate levels and heightened market volatility. The company chose to hold all the Bitcoin it mined, pushing its corporate treasury to 49,179 BTC, making it one of the largest institutional holders of Bitcoin globally.

CleanSpark, another publicly listed mining company focused on sustainable energy, also reported gains. The firm produced 694 BTC in May, a 9% increase from April, and now holds 12,502 BTC in reserves. CleanSpark increased its operational hashrate to 45.6 exahashes per second by the end of May, representing a 7.5% increase from the previous month. This strategy of holding onto mined Bitcoin indicates a deeper confidence in the future value of the cryptocurrency.

Institutional players are also continuing to accumulate Bitcoin. Strategy’s most recent acquisition took place on June 9, when it bought 1,045 BTC worth around $110 million. This brought the firm’s total Bitcoin holdings to 582,000 BTC. According to data from SaylorTracker, Strategy is now up more than 50% on its Bitcoin investment, which translates into over $20 billion in unrealized gains. This timing is notable, as the announcement was made during a weekend of heightened conflict between Israel and Iran. Despite these geopolitical developments, Bitcoin only experienced a minor 3% dip since the conflict escalated, indicating strong investor interest in Bitcoin exchange-traded funds (ETFs), which recorded more than $1.3 billion in net inflows over the past week.

Market sentiment remains bullish, with the Crypto Fear and Greed Index standing at 61. This suggests that investors are still optimistic in the face of global uncertainty. However, not all analysts share this confidence. Some analysts have warned that if Iran were to close the Strait of Hormuz—a crucial passage for 20% of the world’s oil shipments—it could cause a spike in energy prices. Such a development would have huge ripple effects across global markets and could potentially drag down risk assets, including cryptocurrencies, due to increased economic pressures.

Overall, Bitcoin is increasingly being seen as a viable alternative to traditional stores of value like gold and US Treasuries. Bitwise CEO highlighted Bitcoin’s total addressable market as not only the $16 trillion gold market but also the $30 trillion-plus held in US Treasury securities by institutions and individual investors. Bitcoin’s positioning as a digital alternative to gold has gained momentum, especially as investors seek tools to hedge against geopolitical risks, inflation, and market instability. With its decentralized design and capped supply, Bitcoin is increasingly seen as a savings technology that offers protection from the risks tied to fiat currencies and government-managed financial systems.

Recent geopolitical developments and fiscal concerns have only strengthened this narrative. In the United States, President Trump’s “Big Beautiful Bill” has come under scrutiny for its projected $2.5 trillion in deficit spending, which adds to the country’s already staggering $37 trillion national debt. Critics, including Elon Musk and other fiscal conservatives, argue that the bill undermines the long-term financial stability of the country. The bond market reacted sharply to these concerns in April of 2025, particularly after Trump’s proposed trade tariffs and the growing debt load. Investors dumped government bonds, which led to a spike in yields as they demanded higher returns to offset the perceived risk of holding US debt. Against this backdrop of fiscal instability and geopolitical tension, Bitcoin continues to attract attention as a potential safe haven.