Block reward mining came a little closer to profitability in December, but those who buy more BTC than mine are already underwater on their latest purchases.
BTC miners closed 2024 on a relatively high note, thanks to the token’s fiat price rise over the past two months. However, the token has since surrendered some of those gains, while mining difficulty continues to set new all-time recordshas risen by a third since Donald Trump was elected president of the United States on November 6.
Mining is currently twice as difficult as it was just a year ago, while the block reward was halved from 6.25 to 3.125 BTC last April. During the same period, some prominent miners – including MARA (NASDAQ: MARA), Riot Platforms (NASDAQ: RIOT) and CleanSpark (NASDAQ: CLSK)—started a ‘HODL’ strategy and refused to sell the BTC they mine.
This HODL-ing is allegedly based on the belief that BTC’s fiat value will continue to rise in perpetuity, offsetting rising energy costs. But as this week’s abrupt BTC price drop has shown, what goes up can also come down.
Some miners – including MARA, Riot and Hut 8 (NASDAQ: HUT)—also take on significant new debt to buy additional BTC on the open market. MARA’s latest BTC purchases saw it raise $1.925 billion, of which $1.53 billion was used to acquire 15,574 BTC at an average price of $98,529. That’s ~$3,500 above BTC’s price as of mid-day Wednesday, currently putting this deal around $54.5 million in the red.
Things could get worse if mining difficulty continues to rise and miners face competition for finite energy resources from units dedicated to other high-performance computing (HPC) tasks, such as AI data centers. Example: Trump and Emirati billionaire Hussain Sajwani just announced that the latter plans to do so spend $20 billion building AI/cloud data centers in many states where American miners tend to congregate.
Russell Cann, Head of Development at Nuclear science (NASDAQ: CORZ), told Financial Times that the AI’s energy needs would “significantly affect how much (BTC) mining can be added to the network.” Cann likened this resource struggle to a simple mathematical equation, “right now from an economic perspective, it’s going to be AI.”
Translated: AI has an actual function, while BTC does nothing except (occasionally) appreciate in value. Barring a massive expansion of the world’s energy infrastructure, or a massive reduction in mining difficulty, BTC’s work certificate (PoW) consensus mechanism seems to be living on borrowed time.
No wonder there are more and more miners diversify their business to include AI data center support. On December 23, TeraWulf (NASDAQ: WULF) announced a deal to lease 70+ megawatts of its upstate New York data center infrastructure to its first AI customer, Core42.
On December 18, Core Scientific CEO Adam Sullivan said his company would have “a relatively equal split” in terms of revenue between AI/BTC operations in 2025. Sullivan appeared to express a preference for AI operations, calling the data center operations “just a radical change from the high volatility (BTC) mining space.”
Made (for now) in the USA
Trump has stated that he wants all future BTC to be “MADE IN THE USA”, a promise he backed up by promising to ease restrictions on how US energy is generated. But until Trump’s plan delivers real improvements, miners will increasingly be pushed to move their business abroad. MARA, for example, has set a goal to base half of its operations outside the United States by 2028, including locations in Abu Dhabi, Kenya, Paraguay and elsewhere.
That is, assuming other nations don’t follow Russia’s lead, which announced on Christmas Eve that it banned mining in 10 regions/territories until March 2031 due to concerns that local grids could not handle the load. Additional regions of Russia will face mining bans during periods of high energy consumption, from three to six months a year.
While hardly at the top of any miner’s itinerary, Iran recently imposed rolling blackout on customers in Tehran and several remote provinces, with unauthorized cryptomining cited as one of the causes. The blackouts coincided with BTC’s rise above $100,000, leading the head of Iran’s state-owned company to criticize “some opportunistic and exploitative individuals (who use) subsidized electricity, public networks and other resources for mining cryptocurrency without permission.”
BTC mining is more than just hot air
Aware of the criticism of BTC miners that soak up electricity needed for more practical purposes, miners are looking for ways to reduce the environmental impact of their futile efforts. Sazmining, for example, recently teased a project in an unspecified Norwegian village to use the excess heat generated from its mining rigs to replace a local “oil-fired boiler.”
MARA is also chasing Nordic heating projects, has announced a 2Mw pilot project in “a community of 11,000 inhabitants in Finland” last summer. On December 20, the company has tweeted the launch of “our second district heating project that heats a city of 67,000 inhabitants,” bringing the number of allegedly warm Finns to “almost 80,000.”
Not to be outdone, blockchain hardware makers Canaan Inc (NASDAQ: CAN) just announced the launch of two new mining rigs “designed to democratize cryptocurrency mining for individuals and turn a home heating system into a crypto mining operation.”
The Avalon Mini 3 has a hash rate of 37.5 Th/s, while the more compact and portable Avalon Nano 3s offer an “affordable, entry-level” option with a 6Th/s rate. Canaan CEO/founder NG Zhang called the rigs “user-friendly, practical mining solutions for the modern individual” that provide “both digital currency and home comfort.” Finally together!
do you give in?
If BTC stubbornly refuses its assigned role as “number go up”, miners holding large amounts of tokens will have to look elsewhere for profits. That seems to be the strategy embarked on by MARA, which on January 3 revealed that it had lent 7,377 of the total 44,893 BTC currently on its balance sheet to third parties to generate “additional returns for our stakeholders.”
MARA did not disclose the names of the BTC borrowers or how many borrowers there were. The company’s VP of Investor Relations, Robert Samuels, tweeted that the loans were “short-term arrangements with well-established third parties.” Samuels said the loans had been “active through 2024” and generated “a modest single-digit return.” The revenue is intended to “compensate for operating costs.”
“Generate returns” is something of a loaded phrase in crypto circles, as it was the practice of many operators who lent customer assets to other operatorswhich lent these assets to yet other operators, each in turn offering greater “returns” to the lenders, with no one seemingly asking where the returns came from.
The result was a domino-like cascade of bankruptcies and criminal chargesand the “crypto winter” that followed kept token prices down for over a year. So if we were MARA investors, we’d want to know more about who was doing what with our BTC.
Cover the halls
Most listed miners have now submitted their December production reports, which, as always, are presented below in descending order of BTC-producing skill.
- MARA produced 890 BTC in December, down 2% from Novemberdespite a 15% increase in low-energy hash rate. MARA chalked up the decline to “a slight drop in luck.” Overall, MARA mined 9,457 BTC last year while buying an additional 22,065 on the open market. MARA’s vault now contains almost three times as many tokens as it did at the end of 2023 (15,174).
- CleanSpark mined 668 BTC in December, 46 more than November’s figure. That brought the 2024 total to 7,024, down from 2023’s 7,391, despite annual hash rate growth reaching an impressive 288%. CleanSpark ended 204 with 9,952 BTC on hand, more than triple the number at the end of 2023. CleanSpark raised $550 million in new debt in December, which it will use to pay off old debt and fund operations, not buy additional BTC .
- Iris energy (NASDAQ: IREN) mined 529 BTC in December, a full 150 more than November’s results, as the average hash rate jumped 8.4 points to 28.1EH/s. For 2024 as a whole, IREN mined 3,984 BTC, down from 4,123 in 2023, despite a 450% year-over-year increase in mining capacity. (Damn, halving!) IREN still celebrated hitting its year-end hash rate target of 31EH/s and aims to increase to 50EH/s in the first half of 2025.
- Riot Platforms produced 516 BTC in December, 4% better than November. Riot increased its hashrate by 155% last year but only mined 4,828 BTC in 2024, down from 6,626 in 2023. After some serious debt raising, Riot acquired 5,784 BTC in December, bringing its total holdings to 17,772 BTC at an average price of ATC a little over $100,000 each (or ~$5,000 higher than their current value).
- Core Scientific self-mined 291 BTC in December, down from 314 in November, but sold only 79 BTC in December after unloading 272 in November. For the year as a whole, Core self-mined 6,595 BTC, less than half of the 13,762 it raised in 2023. This decline is partly due to Core’s multi-billion dollar deal with ‘AI Hyperscaler’ CoreWeave this summer, where CoreWeave exercised its last option to contract for additional infrastructure in October.
- Cipher Mining (NASDAQ: CIFR) mined 234 BTC in December, up from 202 in November, while selling 217 BTC, reducing its reserve to 1,344 tokens.
- Bit farms (NASDAQ: BITF) generated 211 BTC in December, four more than in November, and sold 147 tokens. Bitfarms earned 2,914 BTC in 2024, down from 4,928 in 2023, despite the hash rate doubling year over year. Bitfarms now has 934 BTC, while its Synthetic HODL™ program (basically buying long-term BTC call options) has returned 135% in dollar terms so far.
- TeraWulf self-mined 158 BTC in December, a significant increase from November’s 115, although that month suffered from scheduled hardware maintenance. The average hash rate improved by 3.5 points from November to 8.4 EH/s. In December, TeraWulf also finalized data center leases for 70 Mw of its infrastructure in a deal that could generate over $1 billion in revenue over the first 10-year period.
- bit deer (NASDAQ: BTDR) self-mined 145 BTC in December, five fewer than the month before. In November, Bitdeer announced plans to raise $400 million in new debt, with most of the funds earmarked for data center expansion and new rigs.
- Hive Digital mined 103 BTC in December, the same as in November. The company’s “HODL portfolio” has grown to 2,805 BTC, nearly two-thirds higher than the total by the end of 2023. Hive in December move its headquarters from Vancouver, Canada, to San Antonio, Texas, “to increase growth and shareholder value in the US market.”
- HUT 8 self-mined 89 BTC in December, five fewer than in November. The figures do not include HUT 8’s agreement with mining client Ionic Digital, such as the latter controversially stopped on December 10. HUT 8 bought another 990 BTC in December, increasing its reserve to 10,096 tokens. 990 BTC were bought at an average price of $101,710, nearly $6,000 higher than their current value, but HUT 8 claims the overall average is much lower due to many of the tokens being mined, not bought.
Watch: Bring Metanet to life with Teranode
title=”YouTube video player” frameborder=”0″ allow=”accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share” referrerpolicy=”strict-origin-when-cross- origin” allowfullscreen=””>
