2025 Digital Mining Industry Depth Report

Summary

A report titled "2025 Digital Mining Industry Report" released by a research institution covers nearly half of the Bitcoin network's computing power and points out that Bitcoin mining has evolved into a capital-intensive data center business centered around energy. New features of the industry include rapid improvements in the efficiency of Application-Specific Integrated Circuits (ASIC), strong inflows of institutional capital, and an increasingly greener energy structure.

1. Scale and Growth - The cumulative electricity consumption in 2024 reaches 138 TWh(. The energy consumption per unit of workload decreases by 24%, to 28.2 J/TH).

2. Decarbonization Process - Sustainable Energy ( Renewable Energy and Nuclear Energy ) have met 52.4% of the Mining load; annual greenhouse gas emissions are 39.8 million tons of carbon dioxide equivalent ( CO₂e ), accounting for approximately 0.08% of global emissions.

3. Geographic Distribution - The United States accounts for approximately 75% of the research report's Mining power. Paraguay, the UAE, Norway, and Bhutan have become secondary hubs.

4. Cost and Profit - The median electricity cost is $45/MWh(MWh). Including all operating expenses(OPEX), the average total cost is $55.5/MWh. The surge in Bitcoin prices in Q4 2024 drives the industry's "Mining Profit"( revenue minus direct electricity costs) to a record high.

5. Risk Factors - Major concerns include: (i) rising energy prices, (ii) policy uncertainty, (iii) concentration of ASIC supply with the top three manufacturers holding over 99% market share (. Common risk mitigation measures include long-term power hedging, geographic diversification, and vertical energy ownership.

Strategic Highlights: The improvement in energy efficiency, new revenue from emerging grid services, and sustained institutional demand offset the impact of the block reward halving in April 2024. However, operators must focus on power cost control, transparent Environmental, Social, and Governance )ESG( reporting, and revenue diversification )AI/HPC hosting, and gas flaring utilization ( to protect profits before the next halving in 2028.

Industry Fundamentals

) Cybersecurity and Economy

1. 2024 Halving: Block rewards are scheduled to decrease from 6.25 bitcoins per block to 3.125 bitcoins. Although transaction fee income accounts for only 6% of miner revenue on average, short-term network congestion proves that transaction fees can exceed 100% of the subsidy during peak loads.

2. Security Budget: Despite the halving of rewards, global hash rate still climbed to 796 EH/s by the end of the year, validating the motivation for miners to reinvest capital.

3. ASIC Development: The latest 5nm and 3nm chip designs have a power consumption of less than 20 J/TH. Prototypes with less than 10 J/TH are expected to be launched in 2025-2026, which means efficiency will double again.

( Capital Structure and Listed Companies

Approximately 41% of the global hash power is controlled by listed mining companies, making a capital structure of mixed debt and equity possible. The deleveraging after 2023 has led to the net debt to EBITDA ratio of most major companies being below 0.5 times.

Environment and ESG Performance

| Indicator | 2024 Value | Change | Remarks | |------|------------|------|------| | Proportion of Sustainable Energy | 52.4% | Increased by 15 percentage points compared to 2023 | 23% Hydropower, 15% Wind Energy, 9.8% Nuclear Energy | | Carbon Intensity | 288g CO₂e/kWh | Decreased by 34% compared to 2021 | Global grid average about 442g | | Total greenhouse gas emissions | 39.8 million tons CO₂e | 21% lower than the model prediction for 2021 | Approximately equal to Slovakia's annual emissions | | Demand Response Reduction | 888 GWh | New Key Performance Indicator | Shows Load Reduction Capability as Required by the Grid | | Adoption Rate of Mitigation Measures | 70.8% of Companies | Continually Rising | Including Renewable Energy Certificates, Carbon Offsetting, Waste Heat Reuse, and Combustion Gas Projects |

ESG Outlook: The ongoing decarbonization of the U.S. power grid, the monetization of gas burning in North America and the Middle East, and the expansion in Northern Europe may reduce the carbon intensity of the entire industry to below 200g CO₂e/kWh by 2027. The debt market has provided preferential pricing of 50-150 basis points for mining companies using over 50% low-carbon power.

Operating Cost Curve Analysis

) Power cost quartile ( cents/kWh )

• ≤3.2 cents: Minimum cost 25%, can be profitable in almost any market condition
• 3.2-4.5 cents: North American or Nordic long-term power purchase agreement (PPA), requires modern ASIC
• 4.5-6.0 cents: Industrial electricity prices or discounted grid electricity, profits rapidly compressed after halving.

• 6 cents: Highest cost 25%, bear market first cuts

ASIC Efficiency Quartile ### J/TH (

• ≤25 J/TH: Latest generation chips, usually immersion cooling
• 25-30 J/TH: 2023 model equipment
• 30-40 J/TH: Hardware from 2021-2022, only feasible with low electricity prices

• 40 J/TH: Old mining machines, require extremely low electricity prices to be profitable

Comprehensive Analysis: The cost to mine 1 Bitcoin ranges from $14,000 to $36,000. Low-cost, high-efficiency operators can "mine and hold" during downturns and monetize grid balancing services; high-cost companies are the first to shut down when prices fall.

Risk and Regulatory Landscape

| Risk | Probability of Occurrence within 12 Months | Potential Impact | Mitigation Strategy | |------|-------------------|----------|----------| | U.S. Federal Energy Consumption Tax Proposal | Medium | Profit margin down by 5 percentage points | Hashrate dispersed to other regions; industry lobbying | | European Carbon Tax | Medium | Increase in Capital Expenditure | Move to Nordic Hydropower Area; Sign Long-term Low-carbon PPA | | ASIC Supply Interruption | Low-Medium | Hashrate Growth Slows | Dual Source Procurement, Inventory Buffer, Pre-order | | Bitcoin price remains depressed in the long term | Medium | Cash flow is tight | Forward contract pre-sale; shifting to AI/HPC workloads |

Strategic Growth Theme

AI/HPC Integration: Renovated facilities for GPU-based AI training. Potential revenue: 1.0-1.5 USD/kWh, higher than Bitcoin Mining's 0.35 USD/kWh.

Vertical Energy Integration: Joint venture with energy producers. Goal: total electricity cost < 3 cents/kWh, and create additional revenue through electricity sales.

Green Bitcoin Premium: The certification program aims to sell "provably green" tokens at a 1-3% premium; early adopters gain reputational and financial advantages.

Valuation and Key Metrics

• The expected EV/EBITDA for major mining companies in North America in 2025 is 4.8-6.2 times. The low multiples reflect residual policy risks and uncertainties in long-term trading fees.
• Each hash price )P/PH(: 45-70 million USD. A lower P/PH indicates lower cost for increasing computing power, but may imply higher operating costs.

) Key Catalysts for the Next 12 Months

• In the second half of 2025, ETF net inflow > 100,000 Bitcoins - Positive for Bitcoin price and Mining income
• 16 J/TH ASIC mass shipment - advantageous for low-cost miners, suppressing old equipment
• U.S. FERC Flexible Load Payment Decision - May Officially Establish Grid Service Revenue
• EU MiCA sustainability rules finalized - Reporting burdens increased, but policy certainty enhanced

Investment Advice

• Increase holdings in vertically integrated mining companies, requiring electricity costs <0.05 USD/kWh, equipment efficiency <25 J/TH, and renewable energy ratio >50%
• After the clarification of U.S. tax and EU carbon disclosure, neutral/hold only provides custody or single regional operators.
• Reduce holdings/avoid mining companies that rely on >$0.07/kWh grid or >40 J/TH equipment; their profits will be significantly compressed when the new generation of ASICs arrives.