Canaccord Expects Bitcoin Mining Economics to Stay Profitable and Stable Through 2025.

Canaccord Genuity Predicts Continued Profitability for Bitcoin Mining in 2025

Bitcoin (BTC) mining is expected to remain profitable in 2025, with steady production economics, according to a recent report by Canaccord Genuity.

The report highlights that mining fundamentals remain strong, with the cost of mining a single bitcoin ranging between $26,000 and $28,000 for most of the leading players in the industry. As of the report’s publication, Bitcoin was trading around $105,000.

Investor and management focus is also shifting toward alternative uses for the significant power resources at the disposal of mining companies, particularly in hosting artificial intelligence (AI) data centers. For example, Core Scientific (CORZ), one of the leading Bitcoin miners, signed a 12-year contract with AI hyperscaler CoreWeave in June 2024, which was considered a pivotal move for the industry.

The report notes that early forecasts suggest AI could eventually surpass the traditional cloud hosting market in terms of demand. Joseph Vafi, one of the analysts behind the report, pointed out that the rise in AI demand could create new growth opportunities for Bitcoin miners.

The report also predicts that more co-hosting agreements, similar to Core Scientific’s deal, will emerge in early 2025, with companies such as Galaxy Digital (GLXY) and Applied Digital (APLD) potentially making announcements in this space.

Following the April 2024 reward halving, many large publicly traded miners are using their capital access to upgrade their fleets, further solidifying their competitive position and expanding their share of the network’s hashrate. The hashrate, which represents the total computational power used to mine and process transactions on Bitcoin’s proof-of-work blockchain, is a key indicator of competition and mining difficulty in the industry.

Overall, Canaccord Genuity remains optimistic about the profitability and future growth potential of Bitcoin mining, with its ongoing shift toward new sectors like AI hosting.