Bitcoin

January's harsh winter intensified the challenges for <a href="https://ultramining.com/news/en/russias-bitcoin-gold-rush-mining-machine-influx-outpaces-rest-of-the-world/">Bitcoin miners</a>, manifesting in soaring <a href="https://ultramining.com/news/en/minnesota-man-faces-accusations-of-electricity-theft-for-bitcoin-mining/">electricity</a> costs and diminishing returns. Public mining entities like <a href="https://ultramining.com/news/en/iris-energy-diversifies-into-ai-with-10-million-nvidia-gpu-purchase-amid-bitcoin-focus/">Iris Energy</a>, <a href="https://ultramining.com/news/en/terawulfs-game-changing-move-75m-investment-in-next-gen-bitcoin-miners/">Terawulf</a>, and <a href="https://ultramining.com/news/en/bitdeer-pioneers-crypto-mining-expansion-with-norway-and-bhutan-data-centers/">Bitdeer</a> reported significant hikes in operational costs, with Iris Energy's per BTC electricity expense surging 29% from December, reaching $18,705. This uptick was attributed to a mix of lower network transaction fees, increased power rates, particularly in <a href="https://ultramining.com/news/en/texas-residents-challenge-bitcoin-mining-industrys-impact-on-power-grid-and-communities/">Texas</a>, and diminished market volatility affecting energy trading gains, according to <a href="https://theminermag.com/news/2024-02-07/bitcoin-mining-electricity-january-2024-surge/">TheMinerMag</a>. 
Bitcoin's network saw a drastic drop in daily <a href="https://ultramining.com/news/en/bitcoin-miners-set-for-a-tough-ride-as-2024-halving-nears-jp-morgan/">production</a> benchmarks, sliding to an all-time low of below 2 BTC/EH/s in January, exacerbated by an escalating network <a href="https://ultramining.com/news/en/impending-bitcoin-halving-may-trigger-major-hashrate-decline-say-experts/">hashrate</a>. The diminishing transaction fees in January, compared to December's substantial 25% contribution to total block rewards, further strained miners' profit margins. 
Terawulf, experiencing nearly a 50% jump in power costs per bitcoin to $16,737, cited "seasonally elevated power prices" in upstate New York as a significant factor. Over six months, Terawulf's average production cost stood below $11,000, highlighting the stark increase faced in January. 
Bitdeer, meanwhile, opted to curtail its hashrate at the Gedu datacenter in Bhutan, anticipating sustained high electricity costs through the quarter's end. This strategic reduction underscores the operational adjustments miners are compelled to make in response to fluctuating energy prices and network dynamics. 
The situation was further aggravated by a cold spell in Texas, leading to a temporary 25% dip in the Bitcoin hashrate. Despite this setback, network competition swiftly recovered, setting new difficulty records and highlighting the relentless pressure on miners navigating the volatile landscape. 
As Bitcoin miners grapple with these challenges, the industry faces a critical examination of sustainability and profitability amidst fluctuating <a href="https://ultramining.com/news/en/impending-bitcoin-halving-may-trigger-major-hashrate-decline-say-experts/">energy costs</a> and network conditions.&nbsp;

Rising Electricity Bills and Lower Bitcoin Production Challenge Miners

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