Bitcoin Miners Face Worst Profit Squeeze in 2 Years

Bitcoin miners are enduring their most challenging profitability environment in two years. A steep drop in bitcoin’s price has pushed production costs for many operators above what they can earn from mining the digital asset.

The weighted average cash cost to produce a single bitcoin among publicly listed miners climbed to around $79,995 in the fourth quarter of 2025, according to the CoinShares Bitcoin Mining report published Wednesday. That figure sits uncomfortably close to or above recent bitcoin prices. The asset traded as low as $68,000 in early 2026 after falling roughly 31% from October 2025 highs near $124,500.

The CoinShares Bitcoin Mining ETF (WGMI) holds a concentrated portfolio of these mining companies, but its largest positions include operators with cost structures that position them to weather the downturn, according to the mining report. The fund’s top two holdings — Cipher Digital Inc. (CIFR) at 16.7% and IREN Limited (IREN) at 15.5% — are among miners with lower production costs in an industry where efficiency now determines survival.

The profitability crisis stems from a combination of factors that have compressed miners’ economics from multiple angles. Hash prices, which measure revenue per unit of computing power dedicated to mining, collapsed to $28–$30 per petahash per second per day in early 2026, according to the report. That represents an all-time low since mining rewards were cut in half during April 2024.

Meanwhile, the bitcoin network recorded three consecutive negative difficulty adjustments in late 2025. That marked the first such streak since July 2022. Difficulty adjustments occur roughly every two weeks and reflect how hard it is to mine new bitcoin.

Consecutive negative adjustments signal that miners are shutting down operations because they can no longer operate profitably. The report characterizes this as evidence of industry capitulation.

Efficiency Gap Widens Among Miners

The low-cost miners in WGMI’s portfolio maintained an edge as the industry struggled. IREN delivered the lowest electricity cost among publicly traded miners at $34,325 per bitcoin in the fourth quarter, the report said. The company’s cash cost to mine one bitcoin came in at $58,462.

Cash cost measures the actual money a miner spends to produce bitcoin, including electricity, labor and maintenance. With the industry average at around $80,000 per bitcoin, miners with lower cash costs had a better chance of staying cash-flow positive or at least minimizing losses while waiting for better conditions.

CleanSpark Inc. (CLSK), the fund’s fifth-largest holding, posted a cash cost of $71,188 per bitcoin in the fourth quarter, the report said. That ranked among the lowest in the sector due to tight control over operating expenses and one of the most efficient mining fleets in the industry at around 16 watts per terahash.

The efficiency gap between leading mining operations running around 15 watts per terahash and struggling competitors using 25 watts or more has grown wide enough to create acquisition opportunities in 2026, the report said. Miners with strong balance sheets could buy distressed assets as higher-cost operators exit the market.

WGMI held $194.4 million in assets and has grown 138.3% over the past year, according to ETF Database. The fund charges a 0.75% expense ratio.

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