CoinShares Q4 2024 Mining Report. Bitcoin vs Gold Mining: The Future of… | by James Butterfill | Apr, 2025

James Butterfill — Head of Analysis

Max Shannon — Analysis Analyst

Matthew Kimmell — Analysis Analyst

The Bitcoin mining business has largely shrugged off halving-related considerations, with community hashrate accelerating sharply in This autumn 2024. This surge was pushed by a mixture of beneficial political developments and a robust worth rally, propelling the hashrate to a report excessive of 900 Eh/s. We now anticipate the community to achieve the symbolic 1 Zettahash/s milestone by July 2025.

On the identical time, valuation multiples throughout the sector have compressed, reflecting a rising investor consensus that Bitcoin mining more and more resembles a zero-sum sport — the place positive aspects in a single miner’s capability instantly erode the market share of others. In response, a number of miners are strategically diversifying into knowledge centre infrastructure and high-performance computing (HPC) internet hosting, looking for to seize extra secure and scalable income streams past Bitcoin.

The weighted common money value to provide one bitcoin amongst publicly listed miners elevated to roughly US$82,162 in This autumn 2024, up from US$55,950 in Q3 — a 47% rise. Excluding Hut 8, whose figures had been skewed by a major tax expense, the typical value stood at US$75,767, representing a 35% quarter-over-quarter improve. Regardless of this, most mining operations remained worthwhile on the prevailing market worth of round US$82,000 per bitcoin. When factoring in non-cash prices resembling depreciation and stock-based compensation, the full common value surged to US$137,018.

We had projected that Bitcoin’s community hashpower would attain 765 Eh/s by the top of 2024. In actuality, it barely exceeded expectations, ending the yr at 778 Eh/s. This was largely pushed by strong worth motion, which inspired miners to speed up {hardware} deployment. Our newest projections now point out that the long-anticipated 1 Zettahash (Zh/s) threshold could possibly be reached as early as July this yr, with hashpower anticipated to climb to 1.28 Zh/s by year-end and attain 2.0 Zh/s by early 2027.

In prior publications now we have detailed our methodology on hashrate prediction utilizing a piecewise exponential mannequin — discovered here.

Hash costs, a important proxy for miner income potential, have proven a modest rebound this yr. Nonetheless, our proprietary forecasting mannequin signifies a gradual structural decline, with costs more likely to stay range-bound between US$35 and $50 per PH/day by to the 2028 halving cycle. Notably, we anticipate the typical hash worth will fall beneath US$40 by Q1 2026, reflecting ongoing effectivity positive aspects and aggressive stress throughout the mining sector.

Gold and Bitcoin are sometimes in contrast as scarce, non-sovereign property. However whereas a lot has been written about their investment case as stores of value, fewer draw the comparability on the manufacturing degree. Each property depend on mining — one bodily, the opposite digital — to introduce new provide. Each industries are outlined by cyclical economics, excessive capital depth, and deep ties to vitality markets.

But the mechanics and incentives of bitcoin mining differ in nuanced methods to gold mining, which finally have an outsized impact on how the economics and techniques of business contributors are each arrange and play out. This report will stroll you thru just a few of their similarities, however maybe extra valuably, their materials variations.

Asset shortage is derived from bodily and computational mining

Gold mining is a centuries-old means of extracting and refining metallic from the earth. It requires figuring out viable deposits, securing permits and land entry, and utilizing heavy equipment to take away ore from the bottom — adopted by chemical therapy to isolate the metallic for downstream distribution.

Bitcoin mining, in contrast, entails repeating a computational course of in a race to settle batches of Bitcoin transactions and earn newly issued cash plus charges. This course of, often called creating Proofs of Work, entails procuring rack area, electrical energy, and specialised {hardware} (ASICS) to effectively run the calculations — adopted by an web connection to broadcast the outcomes to the Bitcoin community.

In each techniques, mining is an unavoidably pricey course of that underpins the shortage of every asset: Bitcoin’s is enforced by code and competitors; gold’s is by bodily and geological location. However the way in which that shortage is extracted, the economics of the producers — and the way every evolves over time — has few similarities.

Bitcoin mining economics are formed by competitors, {hardware} cycles, and a number of income streams

Gold mining has comparatively forecastable economics. Corporations mannequin reserve estimates, ore grades, and extraction timelines with affordable accuracy, although preliminary estimates can nonetheless be far off the mark: about one in 5 developed gold mining tasks proves worthwhile over its lifecycle. Main prices — labour, vitality, tools, regulatory compliance, and remediation — are properly projected prematurely. Depreciation principally quantities to the unusual put on and tear of equipment or reserve depletion. The first short-to-medium time period uncertainty is oftentimes the notoriously regular market worth of gold itself. And on high of that, virtually all of those enter prices will be successfully hedged.

Bitcoin mining, in contrast, is rather more dynamic and unpredictable. Firm revenues rely not solely on the comparatively risky market worth of bitcoin, however on their share of the worldwide hashrate (learn: world competitors). If others develop their operations extra aggressively, your relative output can decline even when your mining operations don’t change. It’s an ongoing variance to contemplate for operators.

Thus, our first distinction is that, not like gold mining, the place manufacturing forecasts are fairly secure, bitcoin miners face the uncertainty of their manufacturing being aware about the entry, exit, and techniques of different business contributors.

One of the vital prices of bitcoin mining firms is depreciation, and extra particularly the depreciation of ASIC equipment. These chips in bitcoin mining machines preserve quickly bettering of their effectivity, urging firms to improve to remain competitive, lengthy earlier than such tools naturally wears out. The implication being depreciation takes place on a timeline of technological progress slightly than bodily deterioration. It’s a main expense — albeit a non-cash one — and marks a key distinction from gold, the place mining tools stays helpful longer, having already skilled nearly all of effectivity positive aspects of their equipment.

The mixed impact of bitcoin manufacturing altering on the whims of business competitors and brief depreciation cycles is a continuing stress to reinvest in new {hardware} to keep up manufacturing ranges — a entice professionals usually name the “ASIC hamster wheel”.

One other, this time constructive, basic distinction is in income construction. Gold miners earn solely by extracting and promoting the unreleased provide saved in reserves. Bitcoin miners nonetheless earn each from extracting unreleased provide and transaction charges. Transaction charges provide a income stream of already launched provide to miners, which varies primarily based on the demand to switch bitcoin. As bitcoin nears its 21 million provide cap, charges will grow to be an more and more vital income stream — a dynamic that gold miners merely don’t have.

**Notice: y-axis is partially proven with an 80% backside vary.

Final, a primarily long-term benefit of mining bitcoin is the power to repurpose a by-product of operations: warmth. As electrical energy passes by their machines, it generates substantial thermal vitality that may be captured and redirected for secondary use — like industrial processes, greenhouse farming, or residential and district heating. It opens up fully new income streams. The affect of reusing warmth will doubtless develop as mining machines commodify and depreciation timelines lengthen. Likewise, gold miners can profit from saleable by-products like silver or zinc — components usually recognized as a part of undertaking planning and handled as an offset to gold manufacturing prices.

Bitcoin mining presents a extra promising environmental future than gold

It’s well-known that gold mining is inherently extractive and leaves an enduring bodily footprint: deforestation, water contamination, tailing ponds, and disruption of ecosystems. In lots of areas, it additionally raises considerations round land rights and employee security.

Bitcoin mining, however, is not bodily extractive and completely electricity-dependent. This opens the door for integration — not battle — with native infrastructure. As a result of miners are cell and interruptible, they will function grid stabilizers and monetize in any other case wasted or stranded vitality sources like flared gasoline, overbuilt hydro, or curtailed wind and photo voltaic.

Unbeknownst to many, bitcoin mining additionally reveals promise as a subsidy for clear vitality and as a strategy to justify grid connection. By co-locating with renewable or nuclear technology, miners can enhance undertaking economics earlier than grid connection — with out counting on publicly funded subsidies.

Lastly, whereas now properly documented, it’s value noting that in comparison with conventional industries, Bitcoin’s carbon profile is lower on average and more transparent. Arguably, it’s even vital for a easy transition to renewable-heavy electrical grids.

We have now virtually no rise in vitality consumption for the reason that 2024 peak, this is because of ever growing effectivity in new mining {hardware}, which is now averaging simply 20W/Th, a 5 fold enchancment in effectivity since 2018.

Quicker cycles and expertise status outline Bitcoin mining funding profiles

Each industries are cyclical and delicate to the worth of the asset they produce. However whereas gold miners usually function on multi-year timelines, bitcoin miners can scale operations up or down extra rapidly in response to market situations. It makes bitcoin mining extra versatile, but in addition extra risky.

Public Bitcoin mining firms have tended to commerce like high-beta tech shares, reflecting their sensitivity to each bitcoin’s worth and broader danger sentiment. In truth, a number of market knowledge suppliers classify listed bitcoin miners within the Expertise sector, not underneath conventional vitality or supplies groupings.

Gold mining firms, nonetheless, are longer-established and sometimes hedge future manufacturing, which might mute publicity to gold’s worth upside and draw back. They’re usually categorized throughout the Supplies sector and evaluated extra like conventional commodity producers.

Capital formation additionally differs. Gold miners usually elevate capital primarily based on reserve estimates and long-term mine plans. Bitcoin miners usually elevate capital extra opportunistically — in latest historical past usually by direct or convertible fairness issuance — to fund fast {hardware} upgrades or knowledge centre expansions. Because of this, they’re extra depending on market sentiment and cycle timing, and have a tendency to function with shorter reinvestment timelines.

Bitcoin mining presents publicity to vitality, compute, and future monetary networks

Gold and Bitcoin could converge long-term to serve related macroeconomic roles, however their manufacturing ecosystems are structurally totally different. Gold mining is slower-moving, bodily, environmentally damaging and resource-depleting. Bitcoin mining is quicker, extra modular, and more likely to be more and more built-in with trendy vitality techniques.

For traders, meaning bitcoin miners are an imperfect digital analogy of gold miners. Relatively they signify a new class of capital-intensive infrastructure, mixing publicity to commodity cycles, vitality markets, and expertise disruption. These investing with long-time horizons ought to contemplate them as a definite, rising asset class with distinctive fundamentals, significantly as transaction charges develop in significance and vitality partnerships evolve.

Understanding these nuances is important, in our opinion, to make knowledgeable funding choices within the distributed monetary system that society is more and more trending in the direction of.

As an funding, bitcoin miners provide publicity to shortage, but in addition a play on the expansion of information centre infrastructure, vitality markets, and the monetization of compute — a convergence conventional mining merely doesn’t seize.

• Please check with earlier reports the place the place we clarify our methodology.

Hut 8’s reported tax expense per bitcoin was US$281,000, primarily as a consequence of a US$93.0 million deferred tax legal responsibility associated to unrealised positive aspects on the truthful worth of its bitcoin holdings, alongside elevated taxable revenue for the total yr 2024. Curiosity expense additionally rose, pushed by the US$150 million Coatue convertible word and extra borrowings from its credit score facility with Coinbase. The agency additional recognised amortisation of debt issuance prices and bills tied to promissory notes.

In This autumn, Hut 8 signed a internet hosting settlement with BITMAIN, securing capability for 15 EH/s of ASICs at its Vega website. To finance this, Hut 8 pledged 968 bitcoins (bought at US$101,761, pledged at US$104,258) as collateral for roughly 30,000 Antminer S21+ ASICs, priced at US$15/TH. That is anticipated to spice up self-mining hashrate to ~10.3 EH/s, with common fleet effectivity bettering to 20.5 J/TH. If the corporate workout routines its buy possibility underneath the BITMAIN settlement, it anticipates growing whole self-mining hashrate to ~25.1 EH/s, with fleet effectivity at 16.0 J/TH.

CleanSpark, Iren, and Cormint had been the one miners to decrease their value of revenues per bitcoin quarter-over-quarter, reducing by 8%, 39%, and 44%, respectively.

CleanSpark’s value discount was pushed by a 4 percentage-point enchancment in uptime (from 94% to 98%), a ~20% increase in fleet effectivity (from 22 J/TH to 18 J/TH), and a 56% improve in deployed hashrate (22 EH/s to 34 EH/s). Moreover, SG&A, depreciation and amortisation (D&A), and stock-based compensation (SBC) per bitcoin all declined. Tax advantages and a modest rise in curiosity revenue additionally supported profitability. Total, money prices fell by 15%, and all-in prices declined by 13%.

Cormint’s This autumn efficiency rebounded after a difficult Q3. Energy costs dropped to 1.8¢/kWh, with a full-year common of 2.3¢/kWh. Working prices remained tightly managed, permitting scale advantages to circulate on to the underside line.

Iren’s working hashrate surged from a median of 12.2 EH/s to 22.6 EH/s, pushed primarily by the enlargement of the Childress facility. Put in capability rose from 21 EH/s to 31 EH/s throughout This autumn. Though the corporate initially focused 50–52 EH/s in H1 2025, it has since paused these plans, suggesting this milestone is now unlikely.

The change to spot electrical energy pricing at Childress diminished electrical energy prices to 3¢/kWh, reducing web electrical energy value per bitcoin mined by 39% (from US$35.4k to US$21.4k). Fleet effectivity improved to 15 J/TH, supporting each profitability and vitality financial savings.

Vitality Portfolio MW Development

Bitcoin miners are more and more reallocating vitality sources in the direction of AI infrastructure, reflecting higher income alternatives, entry to capital, and investor curiosity.

Core Scientific (CORZ) and Cipher Mining (CIFR) are main this transition:

• CORZ has dedicated 43% of its capability to AI (both lively or contracted).
• CIFR plans to allocate 35% of future capability to AI, supported by a US$50 million funding from SoftBank.
• CORZ stays the one miner with important accomplished AI infrastructure, with over 500 MW underneath contract.

Q1 outcomes might disappoint as hash worth continued its decline as a consequence of Bitcoin buying and selling in a slim vary between US$80,000 and US$90,000. Q2 outcomes could present deterioration, as tariffs on imported mining rigs vary from 24% (Malaysia) to 54% (China). Miners counting on older or much less environment friendly rigs face larger publicity to those tariffs.

• CORZ is best insulated, because it transitions to HPC. Its capital expenditure stays fastened at US$1.5 million/MW, with new websites anticipated to incur prices ~20% larger, in step with business friends.
• BTDR, which manufactures its personal tools, could expertise margin stress on exterior US gross sales.

Valuation multiples have compressed, reflecting a rising market consensus that Bitcoin mining is a zero-sum sport, the place progress by one miner diminishes others’ market share. Because of this, miners are pivoting in the direction of knowledge centre infrastructure and HPC internet hosting, which provide extra predictable and diversified income streams.

The “Retailer of Worth” narrative is gaining momentum within the US. A Q1 2025 proposal for a Bitcoin Strategic Reserve could also be applied sooner or later in a budget-neutral means. Nonetheless, in keeping with Bessent, gold won’t be offered or devalued to finance Bitcoin purchases.

Key state-level initiatives embody:

• Arizona: Laws to allocate 10% of reserves (~106k BTC) has reached its ultimate legislative stage.
• Oklahoma: An identical proposal (equal to ~17.8k BTC) is at stage 4.
• Texas: Contemplating an allocation of ~2.2k BTC utilizing 1% of reserves.

Mixed, these initiatives might end in as much as US$10.3 billion in cumulative shopping for stress at present costs.

Total, we imagine that the majority potential macroeconomic eventualities off the again of ‘Liberation Day’ stay supportive of Bitcoin. The introduction of reciprocal tariffs is more likely to gasoline inflation in each the US and its buying and selling companions. US commerce companions might face elevated inflation whereas concurrently contending with progress headwinds. This dynamic could compel them to undertake extra accommodative fiscal and financial insurance policies — measures that always result in forex debasement, finally enhancing Bitcoin’s enchantment as a non-sovereign, inflation-resistant asset.

In the US, the outlook is extra ambiguous. Each Trump and Bessent have signalled a desire for decrease long-term yields, significantly on the 10-year Treasury. Whereas the underlying motivations will be speculated — resembling lowering debt servicing burdens or boosting asset markets — this stance usually helps curiosity rate-sensitive property like Bitcoin. At this present second, the alternative has occurred. US 10-year yields have fallen beneath 4%, however has since reversed larger again as much as 4.5% and now sitting round 4.3% after suspicions of the premise commerce unwind, a tarnished US status and an more and more precarious place for the US Greenback because the world’s reserve forex, and entrenched beliefs that Trump won’t again down from his tariffs and additional spike inflation. Nonetheless, this disaster is a manufactured disaster and will be rapidly reversed with tariff concessions and offers.

Nonetheless, these alerts might also mirror softening ahead earnings expectations for equities, elevating considerations about an impending slowdown. This presents a key danger for broader markets — and by extension, Bitcoin — if the asset remains to be perceived by traders as a high-beta, risk-on instrument. In a worldwide downturn, such sentiment might result in Bitcoin buying and selling in step with equities, regardless of its longer-term store-of-value narrative.

Regardless of this, Bitcoin has held up comparatively properly in comparison with fairness markets since “Liberation Day”. This resilience underscores its distinctive qualities: a globally tradeable, government-neutral asset with a set provide that’s accessible 24/7/365. Because of this, market contributors are more and more recognising Bitcoin as a reputable long-term retailer of worth.