Author | James Butterfill
Compiled by Wu Shuo Blockchain
TL;DR: Key takeaways from the Bitcoin Mining Report Q1 2026
· Profits under severe pressure: Q4 2025 became the most challenging quarter since the halving, with coin price corrections and high hash rate combining to drive hash price below $30/PH/day—a five-year low—leaving approximately 15–20% of older mining rigs globally unprofitable.
· AI transformation accelerates: Listed mining companies have collectively announced over $70 billion in AI/HPC contracts. Capital markets are assigning a high premium to the AI narrative (valuation multiples reaching 12.3x), and the industry is rapidly diverging into “infrastructure providers” and “pure mining companies.”
· Temporary hash rate pullback: Due to a combination of profit compression, winter power rationing, and regulatory inspections, the global hash rate declined by approximately 10% from its peak in Q4; however, models predict industry resilience, with global hash rate rebounding and rising to 1.8 ZH/s by the end of 2026.
· Cost and Debt Restructuring: AI infrastructure development has caused the per-BTC all-in cost to surge and led to substantial debt for some hybrid mining companies (e.g., CIFR, WULF); in contrast, low-leverage miners such as CLSK and HIVE have demonstrated strong financial discipline and a clear advantage in pure mining costs.
· Key takeaway: The mining industry is undergoing a profound structural restructuring. If the price of BTC does not rebound above $100,000 by 2026, high-cost miners will accelerate their exit (miner capitulation), while operators with ultra-low energy costs or successful transitions into AI will dominate the future capital markets. (Related reading: Bitcoin mining companies accelerate away from mining era, MARA heavily sells coins to invest in AI)
I. Executive Summary
The fourth quarter of 2025 was the most challenging quarter for Bitcoin miners since the April 2024 halving. A significant price correction in Bitcoin—from a historical high of approximately $124,500 in early October to around $86,000 by the end of December, a drawdown of about 31%—combined with network hash rate near all-time highs, compressed hashprice to its lowest level in five years.
In the fourth quarter of 2025, the weighted average cash cost to mine one bitcoin by publicly traded mining companies rose to approximately $79,995.
This quarter highlighted three core themes:
Profitability under pressure: Hash price has dropped to approximately $36–38 per PH/s/day, nearing or reaching the break-even point for many miners. Three consecutive difficulty reductions—the first such streak since July 2022—signal “miner capitulation.” Entering the first quarter, hash price fell further to $29 per PH/s/day, meaning miners must endure additional pain.
AI/HPC transformation accelerates: the divide between pure mining companies and infrastructure firms pivoting to AI continues to widen. To date, the entire publicly traded mining sector has collectively announced AI/HPC contracts valued at over $70 billion. WULF, CORZ, CIFR, and HUT are effectively evolving into data center operators that also mine Bitcoin.
Capital structure restructuring: Multiple mining companies have taken on substantial debt to raise funds for AI infrastructure construction. IREN currently carries $3.7 billion in convertible notes; WULF’s total debt amounts to $5.7 billion; CIFR has issued $1.7 billion in senior secured notes. The industry’s overall leverage ratio has fundamentally altered its risk profile.
II. AI and Bitcoin Mining Compete for Rack Space
AI is continuously competing for rack space in many data centers, which over the long term could drive Bitcoin mining toward more intermittent and cheaper sources of electricity.
The migration of Bitcoin miners into the AI and high-performance computing (HPC) sectors is accelerating rapidly. According to recent company announcements, by the end of this year, publicly traded mining companies may generate up to 70% of their revenue from AI, compared to approximately 30% currently. What began as a peripheral diversification strategy is increasingly becoming a core business.
Between 2025 and early 2026, Bitcoin mining companies signed multiple GPU co-location and cloud service agreements with hyperscalers, totaling over $70 billion. Although most agreements plan for new data center construction, significant business cannibalization and shutdowns of existing mining facilities are likely to occur. As a result, as the contracted capacity under these agreements gradually ramps up, the share of Bitcoin mining in these operators’ revenues will decline significantly throughout 2026.
This shift is largely driven by economic considerations. Hashrate prices remain near cyclical lows, compressing mining profit margins, while AI infrastructure offers structurally higher and more stable returns. In this context, reallocating power and capital to high-performance computing (HPC) makes perfect sense, especially for operators with scalable energy resources and existing data center capabilities.
Nevertheless, this transition is not uniform.
- Some mining companies, such as IREN and Bitfarms, are actively repositioning themselves as HPC providers, using mining as a bridge into AI infrastructure.
- Meanwhile, other mining companies, such as CleanSpark, continue to prioritize mining operations in the short term, leveraging their recently developed capacity to generate revenue while gradually expanding their presence in the AI sector.
- The third group remains committed to Bitcoin mining but is evolving its operational approach. These operators are no longer pursuing ultra-large-scale facilities; instead, they focus on the lowest-cost, often intermittent energy sources, such as stranded renewables or flare gas. For example, Marathon has deployed smaller, localized containerized sites of approximately 10 megawatts at the edge of energy networks. This configuration is well-suited for mining operations that can tolerate power interruptions but is incompatible with AI workloads requiring nearly continuous, uninterrupted operation.
Load balancing is likely to remain a lasting niche within the mining industry. By providing demand-side flexibility to grids such as ERCOT in Texas, miners can secure more favorable electricity rates. The importance of this role may grow over time, although it may increasingly attract smaller, more specialized operators.
A key unresolved question is how durable this AI-driven transformation will be. While current economic conditions are heavily skewed toward AI, mining operations remain highly sensitive to Bitcoin’s price. If mining profitability experiences a substantial rebound, some operators may reassess capital allocation between the two businesses. In this sense, the current trend may not represent a permanent transformation, but rather a result of relative returns.
In the long term, this may mean that the population of pure mining enterprises will shrink, while hybrid infrastructure companies spanning mining and AI will become more widespread. Meanwhile, new participants may emerge to fill the niche markets left by established players, particularly in energy-constrained or highly flexible markets.
There is a significant cost difference between Bitcoin mining infrastructure (approximately $700,000 to $1 million per megawatt) and AI infrastructure (approximately $8 million to $15 million per megawatt), and this conversion opportunity is currently being大规模 monetized:
CORZ: Approximately 350 MW of high-performance computing (HPC) has been powered on, and approximately 200 MW is currently being billed. The contract with CoreWeave has been expanded to $10.2 billion over 12 years. The goal is to achieve full commissioning of all 590 MW by early 2027.
- WULF: The Lake Mariner site has already brought online 39 megawatts of critical IT capacity. Total contracted HPC revenue has reached $12.8 billion. Other facilities are progressing on schedule for completion before the fourth quarter of 2026. The platform will expand to five locations with a total capacity of approximately 2.9 gigawatts (GW).
- CIFR: Collaborating with Fortress Credit Advisors to develop the 300 MW Barber Lake site. A multi-billion-dollar Fluidstack agreement (backed by Google) has been reached. No revenue has been generated yet.
- IREN: Scale has expanded to over 10,900 NVIDIA GPUs. Childress Horizon 1–4 expansion projects (up to 200 MW liquid-cooled GPUs). AI cloud service revenue reached $17.3 million in the fourth quarter.
- HUT: Signed a 15-year, $7 billion lease agreement for 245 MW with Fluidstack at the River Bend facility in Louisiana, with the first data hall scheduled to launch in early 2027.
The failure of the CORZ and CoreWeave merger (rejected by shareholders on October 30, 2025) highlights the tension between infrastructure value and equity value. CORZ subsequently restated its financials due to improper capitalization of assets committed for decommissioning during the HPC transition, underscoring the complexity of its accounting practices.
Revenue contributions are still in early stages but growing: CORZ’s AI/HPC data centers accounted for 39% of its fourth-quarter revenue; WULF’s HPC business accounted for 27%; IREN’s AI cloud business accounted for 9%; HIVE’s HPC business accounted for 5%. Although mining remains dominant, it is clear that AI’s revenue contribution will continue to grow across the board.
III. Global Hashrate
In late August 2025, the Bitcoin network reached a significant milestone as hash rate surpassed 1 ZH/s for the first time. By early October, the network hash rate peaked at approximately 1,160 EH/s.
However, a significant reversal occurred in the fourth quarter. The global hash rate dropped by approximately 10% from its October peak, falling to around 1,045 EH/s by the end of December (and further declining to 850 EH/s in early February before recovering), accompanied by three consecutive mining difficulty reductions—the first such streak since July 2022. This was primarily driven by the following factors:
The BTC price correction has caused older mining rigs from the S19 era to fall below their break-even point (the break-even electricity price for S19 XP dropped from approximately $0.12/kWh in December 2024 to approximately $0.077/kWh in December 2025).
Rising winter energy costs and ERCOT (Electric Reliability Council of Texas) curtailment measures led to a sharp increase in unprofitable mining hours between November and December.
Regulatory actions restarted in China's Xinjiang region (a crackdown in December 2025 restricted mining operations, although this capacity was not permanently relocated).
Despite a short-term decline, the Bitcoin network added approximately 300 EH/s of hash rate throughout 2025. As of the time of writing, the total network hash rate remains roughly at the end-of-2025 level, at about 1,020 EH/s.
Although the recent hash rate pullback may appear concerning, viewing it on a logarithmic scale reveals that its severity is far less than China’s 2021 mining ban. This is primarily the result of cyclical and weather-related factors rather than an indication of a more severe crisis looming for the industry. The subsequent strong rebound in hash rate further underscores that many miners still view mining as an economically viable business activity.
Based on our previously detailed piecewise prediction model, we currently anticipate that the global hash rate will reach 1.8 Zetahashes (ZH/s) by the end of 2026 and 2 Zetahashes (ZH/s) by the end of March 2027, a delay of one month from our prior forecast.
Hashrate geographic shift: The top three countries (the United States, China, and Russia) control approximately 68% of global hashrate. The United States' market share increased by about 2 percentage points quarter-over-quarter (QoQ). Driven by mining companies such as HIVE (300 MW project in Paraguay) and BTDR (40 MW project in Ethiopia), emerging markets including Paraguay, Ethiopia, and Oman have successfully entered the global top ten.
Four: Hashrate Price Dynamics
Hash price, the metric determining miners' income per unit of hashing power, peaked at approximately $63/PH/s/day in July 2025 and continued to decline throughout the fourth quarter. By November, it had dropped to around $35–37/PH/s/day, hitting a five-year low at the time. A brief rebound to $38–40/PH/s/day occurred at the end of December and early January, but this was short-lived; hash price collapsed further entering the first quarter of 2026, falling to approximately $28–30/PH/s/day by early March, setting a new all-time low since the halving.
This downturn was caused by a combination of factors: record-high mining difficulty (peaking at 155.97T after a 6.31% increase on October 29), weak Bitcoin prices (down approximately 31% from October’s historical high), and extremely low transaction fee income (consistently below 1% of the total block reward, averaging about 0.018 BTC per block).
This has created the most challenging profit environment since the April 2024 halving. With average industrial electricity prices at $0.05/kWh (and $0.077/kWh for the S19 XP), miners operating older-generation machines, such as those with an efficiency of around 29.5 J/TH like the S19j Pro, have been operating well below break-even points by the end of the year, and conditions have worsened further entering 2026.
Latest forecast: The deterioration in hash rate pricing conditions has exceeded our previous expectations, dipping to around $28/PH/s/day in late February and rebounding to approximately $30–35 as of this writing. At current levels, miners operating older-generation machines require electricity prices below $0.05/kWh to remain cash-flow positive, while the latest-generation models (with efficiency below 15 J/TH) still maintain healthy profit margins under typical industrial electricity rates. For hash rate prices to sustainably rebound above $40, Bitcoin’s price would need to rally to $100,000 by year-end, and its price increase must outpace the ongoing growth of global network hash rate.
Unless Bitcoin prices experience a substantial rebound, we expect high-cost operators to face further “miner capitulation” in the first half of 2026. The current mining economics are insufficient to trigger a large-scale hardware refresh cycle. Hashrate prices must first decline further, forcing enough outdated capacity and operators offline, thereby reducing the network’s total hashrate and mining difficulty, before creating an entry opportunity for new Bitcoin miners or sufficient incentive for existing operators to upgrade. However, despite relentless profit compression, the network’s total hashrate has demonstrated remarkable resilience. This may be supported by multiple factors: state-backed mining activities driven by strategic rather than purely economic motives; operators with access to extremely cheap or stranded power; and ASIC manufacturers connecting unsold inventory to their own facilities to fulfill their order commitments with foundries such as TSMC and Samsung.
The pain in the mining industry has triggered widespread selling and surrender by miners. The BTC holdings of publicly traded mining companies have collectively decreased by over 15,000 BTC from their peak, with Core Scientific selling approximately 1,900 BTC (around $175 million) in January alone and planning to liquidate nearly all remaining holdings by the first quarter of 2026; Bitdeer zeroed out its treasury in February; and Riot sold 1,818 BTC (approximately $162 million) in December 2025.
We believe it is not unrealistic to assume that Bitcoin’s price could rebound to the $100,000 mark; if this level is reached, hash rate prices could rise to $37/PH/s/day. If the price remains below $80,000 for the remainder of this year and mining difficulty continues to rise, we expect hash rate prices to continue declining. However, under this scenario, the actual outcome could differ: as miners shut down unprofitable equipment, total network hash rate may further decrease, making hash rate prices more likely to stabilize. If we see the price begin to test the historical high of $126,000, hash rate prices could surge to $59/PH/s/day.
The decline in hash rate prices has far exceeded our expectations; although we believe this is a temporary phenomenon triggered by recent coin price declines, we anticipate it will gradually stabilize within the range of $30 to $40 per PH per day.
Current hash rate prices have made it unprofitable to continue operating several models of miners. At the current hash rate price level of $30 per PH/day, any miner with performance below the S19 XP and facing electricity costs of $0.06 per kWh (6 cents per kWh) or higher is operating at a loss—we estimate that these devices account for approximately 15% to 20% of the global active miner fleet.
V. Mining Cost Analysis
1. Overview
The table below shows the detailed cost per BTC for all mining companies included in the study for the fourth quarter of 2025. All data are priced in U.S. dollars per BTC mined and use the revenue-share methodology described in the appendix to allocate related costs to self-mining operations.
Key observations:
The construction of AI/HPC infrastructure is distorting the headline cost-per-BTC metrics for hybrid operators. Debt, selling, general and administrative expenses (SG&A), and depreciation and amortization (D&A) arising from AI infrastructure buildouts are being allocated across a shrinking BTC production base, thereby inflating the headline cost-per-BTC figures. For companies such as WULF, CORZ, and CIFR, their all-in costs are increasingly reflecting the economics of transitioning into data center operators, rather than those of pure Bitcoin mining.
There has been a substantial increase in electricity costs across the industry compared to the second quarter of 2025, reflecting higher network mining difficulty diluting BTC yield per coin, rising winter energy costs, and a decline in BTC price.
Depreciation and amortization (D&A) represent the largest component of non-cash costs and vary significantly across companies due to differing depreciation policies. MARA’s $136,000/BTC and CIFR’s $88,000/BTC are outliers—MARA owns a large fleet of mining equipment, while CIFR uses a 3-year useful life assumption for depreciation.
Stock-based compensation (SBC) remains a significant differentiator. HUT’s $48,500/BTC (primarily one-time awards to the CEO/CSO) and CORZ’s $35,500/BTC are outliers. BTDR ($3,900/BTC) and CLSK ($6,700/BTC) demonstrate the most stringent financial discipline.
Interest costs are currently having a significant impact on several mining companies. WULF ($145,000/BTC), CIFR ($56,000/BTC), and BTDR ($16,000/BTC) carry substantial debt. In contrast, HIVE ($320/BTC) and CLSK ($830/BTC) have extremely low leverage, giving them significant structural advantages.
2. Details of Each Company
MARA (MARA Holdings)
BTC produced: 2,011
Total cost: $153,040/BTC
Cash cost (pre-tax): $103,605/BTC
In the fourth quarter, MARA produced 2,011 BTC, remaining the largest publicly traded mining company by output. As of the end of December, the company’s energised hashrate reached 53.2 EH/s (a 15% increase this quarter); however, due to rising network difficulty, daily average production declined to approximately 21.9 BTC, lower than in previous quarters.
Its electricity cost is $64,703/BTC, which is average among peers, reflecting its geographically diverse operations and high reliance on third-party hosting (which accounts for $79.4 million of the total $130.1 million in electricity costs). Its depreciation and amortization (D&A) is exceptionally high at $136,166/BTC, the highest among peers, reflecting its large-scale mining hardware fleet (total D&A for the fiscal year was $772.8 million).
The reported consolidated cost was significantly distorted by a $183.4 million income tax benefit arising from fair value adjustments to BTC holdings under ASU 2023–08. Excluding this non-operating gain, the consolidated cost rose to $240,407. In the fourth quarter, MARA maintained its "HODL" strategy, refraining from selling BTC and keeping 7,377 BTC in third-party lending arrangements. However, the company began softening this stance in the third quarter of 2025, permitting the sale of newly mined BTC to fund operations. In its 10-K filing submitted on March 2, 2026, MARA further expanded this policy, authorizing sales from its entire reserve of 53,822 BTC on the balance sheet. This shift was partly driven by pressure on its $350 million Bitcoin-backed credit facility— as BTC declined toward $68,000 in early 2026, the loan-to-value (LTV) ratio of the loan rose to approximately 87%. This marks a substantial departure from its comprehensive HODL strategy adopted in July 2024.
In addition, the company announced a partnership with Starwood Capital in AI and HPC data centers, and acquired a 64% stake in Exaion for $174.5 million in February 2026, signaling its accelerated diversification beyond pure mining.
IREN (IREN Limited)
BTC produced: 1,664
Total cost: $140,441/BTC
Cash cost: $58,462/BTC
Thanks to favorable power agreements at the Childress facility in Texas and $1.8 million in demand response revenue in the fourth quarter, IREN achieved the lowest power cost per BTC at just $34,325. Its installed hash rate reached 46 EH/s, with a fleet energy efficiency of approximately 15 W/T.
Its stock-based compensation (SBC) cost was $31,717/BTC, the second highest among peers (Q4 SBC was $58.2 million, a 7.3-fold year-over-year increase driven primarily by options with a $75 strike price and a large number of restricted stock units (RSUs) vesting). The associated payroll taxes increased actual cash costs by $6.8 million. Depreciation and amortization (D&A) nearly doubled year-over-year to $99.2 million, reflecting the expansion of the Childress project.
IREN carries $3.7 billion in convertible notes, divided into five tranches (2029–2033), the highest debt burden among peers at face value; however, interest expenses remain manageable due to low coupon rates (2.75%–3.50%). Non-cash debt conversion inducement costs of $111.8 million and deferred tax benefits of $182.5 million are excluded from the cost analysis. Its AI cloud service revenue reached $17.3 million (9% of total revenue), while the Horizon 1–4 GPU expansion projects (up to 200 MW) are currently under construction.
CLSK (CleanSpark)
BTC produced: 1,821
Total cost: $118,932/BTC
Cash cost (pre-tax): $71,188/BTC
CleanSpark has demonstrated exceptional operational discipline. Its sales and administrative expenses (SG&A) are $17,848/BTC, and its stock-based compensation (SBC) is $6,662/BTC, both among the lowest in the industry. A 100% mining-only allocation (no custody or HPC revenue) simplifies cost analysis.
The electricity cost rose to $52,463/BTC compared to the second quarter ($44,679), reflecting increased mining difficulty. With an installed capacity of approximately 50 EH/s, the fleet efficiency of around 16 W/T remains industry-leading. Depreciation and amortization (D&A) stood at $58,381/BTC, broadly in line with peers. Interest expenses were minimal ($830/BTC), reflecting a low-leverage balance sheet.
New CEO Matt Schultz (who succeeded Zach Bradford in August 2025) stated that, if market conditions permit, the hash rate could rise to approximately 60 EH/s. The company is exploring diversification of equipment suppliers to reduce reliance on Bitmain. No specific AI/HPC plans have been announced yet, though management has hinted at the potential monetization of data center assets near metropolitan areas (such as the Georgia facility). Note: CLSK’s fiscal year ends on September 30, meaning the current data pertains to its first quarter of fiscal year 2026.
RIOT (Riot Platforms)
BTC produced: 1,324
Total cost: $170,366/BTC
Cash cost (pre-tax): $102,538/BTC
Riot produced 1,324 BTC with an average deployed hash rate of 31.5 EH/s. The $9.9 million in ERCOT demand response credits for the fourth quarter (totaling $56.7 million for the full fiscal year) significantly reduced its electricity cost of $49,196 per BTC, effectively offsetting total electricity expenses.
Sales and administrative expenses (SG&A) reached $31,534/BTC, among the highest in the industry, reflecting corporate overhead and development costs for the 1 GW Corsicana project. Stock-based compensation (SBC) amounted to $21,586/BTC, at a high level. Depreciation and amortization (D&A) stood at $66,900/BTC, reflecting ongoing investment in mining equipment. As of December 31, the company held 17,722 BTC, valued at over $1.5 billion based on the period-end price.
Riot's strategic focus is on the Corsicana project, where 600 megawatts have been allocated for AI workloads. Although this represents a significant long-term opportunity, fourth-quarter revenue was still predominantly driven by mining operations. With a total site capacity of 1 gigawatt, Riot is among the largest single-site facility operators in North America.
CORZ (Core Scientific)
BTC produced: 421
Total cost: $168,693/BTC
Cash cost: $110,282/BTC
The fourth quarter marked a milestone in CORZ’s transition to AI/HPC. Hosting revenue reached $31.3 million (39% of total revenue, up from $8.5 million in Q4 2024). Due to deliberate reallocation of capacity toward the HPC sector, self-mining revenue declined year-over-year from $79.9 million to $42.2 million.
The lower BTC production (421 BTC) elevated per-BTC metrics across the board. Sales and administrative expenses (SG&A) reached $47,510/BTC, and stock-based compensation (SBC) hit $35,506/BTC—both the highest in the industry—reflecting corporate overhead costs and expenses from the failed CoreWeave merger. The fleet’s efficiency of approximately 24.7 W/T lags behind peers (15–18 W/T), resulting in electricity costs of $66,720/BTC.
The failed CoreWeave merger (October 30, 2025) introduced uncertainty, but execution continues: approximately 350 MW are live, about 200 MW are under billing, with a target of fully commissioning 590 MW by early 2027 (representing $10.2 billion in contract value over 12 years). Due to improper capitalization of assets committed for decommissioning during the HPC transition, the company issued a significant restatement of its 2024–2025 financial data, resulting in a change of auditor to KPMG and a determination that internal controls are ineffective. Depreciation and amortization (D&A) stands at $17,701/BTC, the lowest among peers, partly reflecting asset impairments following the restatement.
WULF (TeraWulf)
BTC produced: 262
Average cost: $471,841/BTC
Cash cost: $384,517/BTC
Important note: The per-BTC cost data for WULF is not comparable to that of pure mining peers.
The company has fundamentally transformed into an AI/HPC infrastructure business, maintaining only a steadily declining mining operation. The 262 BTC mined this quarter were generated alongside $9.7 million in HPC leasing revenue.
Mining revenue decreased 40% quarter-over-quarter (QoQ) to $26.1 million. HPC leasing revenue increased 35% quarter-over-quarter to $9.7 million (accounting for 27% of total Q4 revenue). Total revenue for fiscal year 2025 was $168.5 million, with the HPC business contributing $16.9 million.
The extremely high all-in cost reflects the following factors: interest expenses of up to $144,974/BTC (total debt reaching $5.7 billion, including $2.5 billion in convertible notes and $3.2 billion in senior secured notes under WULF Compute); sales and administrative expenses (SG&A) of $167,221/BTC (primarily due to workforce expansion and milestone-based compensation); and depreciation and amortization (D&A) of $77,217/BTC (from new HPC infrastructure). By the end of 2025, the company’s cash reserves reached $3.7 billion (up from $274 million), reflecting significant capital formation. To date, 522 MW of capacity has been contracted under $12.8 billion in long-term customer agreements.
CIFR (Cipher Digital)
BTC produced: 591 coins
Total cost: $231,980/BTC
Cash cost: $103,516/BTC
CIFR's total cost is the second highest (excluding WULF), primarily driven by depreciation and amortization (D&A) of $87,768/BTC (based on a 3-year useful life assumption adopted in 2024) and interest expenses of $56,445/BTC.
Interest expenses surged as the defining feature of CIFR's fourth quarter: it issued $1.733 billion in senior secured notes with a 7.125% interest rate in November 2025, causing interest expenditures in the fourth quarter to spike to $33.4 million, compared to just $3.2 million in total interest for the first nine months. Electricity costs stood at $41,047/BTC, highly competitive (with power purchase agreements at the Odessa site around $0.028/kWh). Stock-based compensation (SBC) reached $40,695/BTC, at a high level, and was classified under "Compensation and Benefits" rather than Selling, General, and Administrative (SG&A) expenses (this reporting approach is unusual).
Significant asset impairments in the fourth quarter (Odessa miner impairment of $45.3 million, Black Pearl impairment of $96.1 million, and asset disposal losses of $29.4 million) have been excluded from the cost analysis. The company renamed itself Cipher Digital Inc. on February 20, 2026. In high-performance computing (HPC), the 300-megawatt Barber Lake site (in partnership with Fortress) and the Fluidstack protocol (supported by Google) lay the foundation for CIFR’s diversification, although they have not yet generated revenue.
HUT (Hut 8 Corp.)
BTC produced: 719 coins
Total cost: $160,402/BTC
Cash cost: $50,332/BTC
Hut 8's apparent all-in costs may seem competitive, but they require careful interpretation due to several one-time items.
Its stock-based compensation (SBC) reached $48,527/BTC, the highest in the industry, primarily driven by equity grants of 2.3 million restricted stock units (RSUs) and performance stock units (PSUs) awarded to the CEO and CSO in November 2025. Q4 SBC amounted to $39.7 million, more than double the $18.1 million recorded in the first nine months of the year. Normalizing SBC would significantly reduce its overall cost.
The general and administrative (G&A) expenses of $7,413/BTC appear artificially low due to a $17.8 million refund of Canadian Harmonized Sales Tax (HST) received in December 2025. Normalized G&A should be closer to approximately $30,000/BTC. The depreciation and amortization (D&A) of $48,621/BTC reflects consolidated financial statement figures; the actual D&A related to mining is lower, since approximately 74% of property, plant, and equipment (PP&E) is associated with mining. The interest expense of $6,840/BTC reflects total debt of approximately $411 million, including TZRC debt at 15.25%, Coinbase debt at 9%, and Coatue convertible notes at 8%.
Thanks to the Bitmain mining rigs at the Vega site (with a hash rate of 14.86 EH/s), its BTC production increased from 578 in the third quarter to 719. The company currently holds 15,679 BTC (valued at approximately $1.37 billion). Its complex business structure—including four business segments, the ABTC subsidiary, and intercompany offsets—makes clear cost attribution highly challenging. The $78.2 million income tax benefit in the fourth quarter (resulting from the reversal of deferred taxes) has been excluded from the calculation.
BTDR (Bitdeer Technologies Group)
BTC produced: 1,673 coins
Total cost: $118,188/BTC
Cash cost: $87,144/BTC
Bitdeer’s overall costs remain highly competitive within the industry, although this is partly reflective of International Financial Reporting Standards (IFRS) practices and multi-segment revenue (SEALMINER miner sales revenue of $23.4 million, HPC/AI revenue of $2.3 million). The average electricity cost increased from $43/MWh in the third quarter to $46/MWh.
The most striking issue was the change in depreciation policy in the fourth quarter: management shortened the useful life of mining equipment, causing depreciation and amortization (D&A) in the cost of revenue (CoR) for self-mining to double quarter-over-quarter (from $31.2 million to $63.9 million), despite a roughly 60% increase in hash rate. The gross margin for self-mining plummeted from 27.7% in the third quarter to 3.6%. This was purely an accounting result, not a reflection of operational deterioration.
Under IFRS reporting, D&A and SBC are bundled within cost of revenue (CoR), complicating comparisons with peers that follow US GAAP. The $16,306/BTC interest expense reflects approximately $1 billion in convertible notes and related-party borrowings. BTDR’s proprietary ASIC chip strategy—featuring the SEALMINER A2 at 16.5 W/TH and the upcoming A3 at 9.7 W/TH—provides a significant competitive advantage, substantially reducing capex/TH compared to purchasing Bitmain miners.
HIVE (HIVE Digital Technologies)
BTC produced: 884 coins
Total cost: $144,321/BTC
Cash cost: $75,274/BTC
HIVE mined 884 BTC in the fourth quarter (its third fiscal quarter ended December 31), with significant production growth driven by expansion in Paraguay. The fleet's energy efficiency improved from 21 W/T to 18.5 W/T.
The electricity cost of $65,368/BTC is the highest among peers (excluding WULF), elevated by a forward-looking accounting change: HIVE capitalized $41.3 million in non-refundable Paraguayan VAT as property, plant, and equipment (PP&E), while expensing $5.5 million in electricity-related VAT as operating expenses (opex). This accounting treatment has simultaneously increased both its D&A and electricity costs compared to peers.
Its SG&A expenses of $9,054/BTC are among the lowest in the industry. Its SBC expenses of $7,501/BTC are moderate (corresponding to RSUs issued at CAD 7.30 in October 2025). Interest expenses are just $320/BTC, the lowest among peers—HIVE’s total debt stands at only $13.8 million, offering significant structural advantages. This quarter, the 100 MW Valenzuela facility came online; HIVE now has a total of 300 MW of ANDE power purchase agreements in Paraguay.
The company faces a contingent VAT liability of approximately $79.2 million (arising from an assessment by the Swedish Tax Agency regarding its Bikupa subsidiary, currently under appeal in court). It paid equipment deposits using 2,079 BTC with attached repurchase options, an unusual capital management approach.
BITF (Bitfarms)
Will be updated after Bitfarms releases its fourth-quarter earnings report.
Six: Mining Company Stock Performance and Valuation
In the fourth quarter, the valuation premium for AI/HPC continued to widen. Companies that have secured HPC contracts now trade at an enterprise value-to-next-twelve-months-sales (EV/NTM sales) multiple of 12.3x, compared to just 5.9x for pure-play mining firms. The decline in BTC price during the fourth quarter (a 31% pullback from its all-time high) created dual headwinds: not only reducing mining revenues, but also significantly eroding the value of BTC holdings in miners’ treasuries.
CORZ’s valuation discount following its failed merger—potentially driven by hedge fund liquidations—stands in stark contrast to the valuation premiums enjoyed by WULF, CIFR, and HUT. Short interest remains elevated across the entire sector, with MARA’s short interest accounting for approximately 30% of its outstanding shares as of the time of writing.
The industry has fundamentally分化 into "infrastructure companies" (such as WULF, CORZ, CIFR, HUT) and "mining companies" (such as MARA, CLSK, RIOT, HIVE). Whether these AI-oriented high valuation multiples are justified ultimately depends on execution: not all announced protocols can be translated into actual operational infrastructure, and the capital requirements behind them remain extremely substantial.
Seven: First Quarter of 2026 and Future Outlook
1. The recovery of hash rate prices depends on BTC price: At a BTC price of approximately $70,000 and hash rate prices of around $30/PH/day, many mid-generation mining fleets are at or below breakeven. If prices remain below $70,000, it could trigger a larger-scale “miner capitulation,” which in turn would benefit survivors by reducing mining difficulty and total network hash rate.
2. Deployment of next-generation hardware: The Bitmain S23 series and SEALMINER A3 (both with energy efficiency below 10 J/TH) are expected to achieve large-scale deployment in the first half of 2026, further widening the energy efficiency gap and accelerating the mining hardware upgrade cycle.
3. AI/HPC revenue inflection point: CORZ aims to fully deliver the CoreWeave project of 590 MW by early 2027. WULF’s Lake Mariner site expansion is ongoing. The market will closely monitor whether contracted revenue translates into actual billing and whether margins can reach the target of over 85%.
4. Divergence in leverage ratios creates M&A catalysts: miners with healthy balance sheets and strong liquidity positions (such as HIVE and CLSK) are poised to become acquirers; however, CLSK has also taken on a significant amount of convertible debt ($1.15 billion at 0% interest) to fund its transition to AI infrastructure.
5. Regional distribution and regulatory environment shifts: The United States continues to expand its market share. Paraguay and Ethiopia are emerging as new mining hubs. Enforcement actions in Xinjiang, China, may prompt hash rate migration overseas. Texas SB 6 bill (signed in June 2025) imposes new requirements on large mining and data center power loads connected to ERCOT, including mandatory remote shutdown capabilities.
6. Industry consolidation: We expect increased merger and acquisition activity by 2026. The efficiency gap between leading fleets (approximately 15 W/T) and lagging fleets (above approximately 25 W/T) is now large enough that acquiring efficient capacity directly may be cheaper than upgrading outdated operational facilities.
Appendix: Methodology
Denominator: The number of BTC produced through self-mining this quarter.
Allocation ratio: Self-mining revenue / total revenue. This ratio is applied to sales and administrative expenses (SG&A), depreciation and amortization (D&A), stock-based compensation (SBC), interest, and taxes.
All-In Cost per BTC = Electricity cost (after deducting power rationing compensation) + SG&A (excluding SBC) + D&A + Net interest + Income tax + SBC — all items are allocated proportionally to mining revenue, where applicable.
Cash Cost per BTC = Operating Costs (excluding D&A) + SG&A (excluding SBC) + Net Interest + Income Tax — all items allocated proportionally.
Electricity cost: Reduced by curtailment / demand response credits. This cost analysis excludes asset impairments, fair value revaluations, and non-operating items (e.g., BTC revaluation gains/losses, derivative fair value changes, debt conversion inducement costs).
Unit of measurement: Unless otherwise stated, all figures are in thousands of U.S. dollars. Non-U.S. dollar financial data have been converted using the average exchange rate for the quarter.