MW Bitcoin miners are losing money minting coins. It's the same problem that killed the penny.

By Frances Yue

Production costs near $80,000 are squeezing miners, forcing shutdowns, asset sales and a pivot to AI

Several bitcoin miners are struggling to stay profitable.

The U.S. government recently retired the penny after two centuries because it had become too expensive to mint. Some bitcoin miners are facing a similar existential threat.

For many miners, it has cost more in recent months to produce a bitcoin than the coin can be sold for, leading them to stop operating some machines and to sell more bitcoin holdings to raise cash.

That selling has put more pressure on the already battered cryptocurrency. Bitcoin (BTCUSD) entered a bear market in November, defined as a drop of at least 20% from a prior peak. It has plunged roughly 44% below its record of more than $126,000 in October 2025 and was trading slightly above $70,000 on Thursday.

The drop is compressing the core of bitcoin's business model: Mining, an energy-intensive process, only works when prices stay above costs. When they don't, margins disappear fast.

Miners use specialized computers to validate transactions and earn newly minted bitcoin and transaction fees, making their businesses highly sensitive to bitcoin prices, electricity costs and the efficiency of their machines.

At the end of last year, the weighted average cost of producing bitcoin was around $79,995, the latest data available, James Butterfill, head of research at crypto asset manager CoinShares, told MarketWatch.

Butterfill said in a March report that the fourth quarter of 2025 was the toughest stretch for bitcoin miners since the April 2024 halving, an event that occurs once every four years and cuts mining rewards in half. He cited a sharp drop in bitcoin prices and intense competition as obstacles.

Since then, pressure has only grown. Bitcoin has traded below that production-cost level since early February, as outflows from bitcoin exchange-traded funds and geopolitical tensions weighed on the crypto.

That backdrop has left many miners struggling to stay profitable. "Profits really started turning negative for bitcoin miners at the start of this year, and that likely hasn't changed," Butterfill said.

Still, the equation is not the same for every miner, as the cost of producing bitcoin differs widely across operators. The chart below shows how bitcoin-mining costs vary across companies.

"The more efficient your machines are, the less energy you need to create the same amount of computing power, and that computing power is what drives how much bitcoin you earn each day," said Henry Robinson, co-founder of bitcoin-mining firm Decimal Digital Currency.

There are just over 20 million bitcoin in circulation, out of a fixed cap of 21 million.

For now, there isn't an immediate threat of bitcoin going the way of the penny - but for a number of miners, profitability no longer looks possible.

Robinson said older machines have seen profitability squeezed the most, while newer equipment can generate positive returns for longer. When power becomes too expensive, some operators simply shut machines off during peak hours and run them only when electricity is cheaper.

That matters especially in places like the U.S., where electricity prices can vary widely by region and by time of day.

Complicating matters, the traditional way of calculating the cost of mining bitcoin may no longer tell the whole story. Because many miners are pivoting to or investing in artificial-intelligence infrastructure, their reported costs increasingly reflect more than just bitcoin mining, CoinShares' Butterfill said.

For example, CoinShares estimated bitcoin miner TeraWulf's $(WULF)$ cash cost of mining one bitcoin at $384,517 in the fourth quarter of 2025. But that doesn't mean TeraWulf was paying that much to mine bitcoin. Butterfill said the number may be distorted because the company is increasingly shifting toward artificial intelligence and high-performance computing, and its reported costs are no longer tied to mining alone.

A representative at TeraWulf didn't respond to an email asking for comment.

TeraWulf is not alone in blurring that line. Other bitcoin miners in the market are also chasing some version of the story of CoreWeave (CRWV), which started as a crypto-mining company before pivoting to become an AI-infrastructure provider. A look at its share price shows why the model is tempting. CoreWeave went public in March 2025 at $40 a share and saw the price go as high as about $184 by June. As of Thursday, the stock had fallen back to around $91, but even after that pullback, it is up 16% so far this year and still trades at more than double its IPO price, according to FactSet data.

With most miners' first-quarter earnings due in May, investors will get a clearer look at which ones can survive the price squeeze and which ones can't.

-Frances Yue

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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April 09, 2026 15:40 ET (19:40 GMT)

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