BitFuFu, a cloud mining company backed by Bitmain, recently released a quarterly report on the state of Bitcoin mining. The report reveals that the average breakeven price for mining one BTC is now at $59,452, which is more than double the cost compared to previous years. This increase in expenses can be attributed to the record hashrate and difficulty levels seen in late 2024.
Despite the higher costs, Bitcoin miners remain confident in the future rally of the cryptocurrency. Even at levels just above $75,000, mining activity remains highly competitive. In late 2023, the cost basis for miners was significantly lower at $25,618, allowing them to hold onto some of their mined coins.
BitFuFu managed to offer viable rented hashing power even in late 2024, thanks to its ability to find electricity costs at an average of $0.04 per KW/h, which is lower than the usual rate used for calculating mining profitability. However, some mining operations may still work at a loss as the cost basis can exceed $70,000 in some cases.
The report also highlights the decline in productivity for Bitcoin miners after the halving event in 2024. Despite this, mining farms continue to build more facilities and utilize the latest mining machines from Bitmain to improve efficiency.
BitFuFu, with its focus on cloud mining services, has experienced significant growth in the past year. In Q3 alone, it achieved a hashrate of 26.2 EH/s, surpassing many other mining pools. The facility has also expanded its capacity from 13.9 EH/s in Q3, 2023.
While the demand for cloud mining services has increased, buyers have seen a 40% decrease in their BTC production due to competition with other pools. However, the overall demand for mining has risen by more than 75% year-on-year. In Q3, BitFuFu recognized $2.2M in gains from BTC sales and retained most of its coins for further capital gains.
To meet the growing demand, BitFuFu has abandoned its low-asset strategy and recently acquired a 51.25% stake in a mining capacity in Ethiopia. The facility now sits on a portfolio of 556 MW of reliable power, up from 339 MW in Q3, 2023.
Despite producing fewer BTC, BitFuFu’s revenues have increased. It achieved total revenues of $90.3M in Q3, 2024, up from $61.2M in the same period the previous year. The company also saw an EBITDA of $5.8M, although there was a net loss of $5M after stock compensation. The reserves of BitFuFu have also grown to $147.2M, up from $76M in December 2023.
Overall, BitFuFu’s quarterly report reveals the challenges and opportunities in the current Bitcoin mining landscape. Despite the higher costs, the company has managed to adapt and thrive in the industry, offering competitive cloud mining services to its clients.