US Bitcoin Miners Spend $2.7B on Electricity in Early 2024 Amid Halving Event
- Bitcoin miners in the U.S. spent $2.7 billion on electricity in the early months of 2024.
- Post-halving in April, the energy required to mine one Bitcoin increased by two times.
The Bitcoin mining industry in the United States has seen a sharp increase in electricity usage and costs in the first quarter of 2024. There has been a growing concern for the sustainability and efficiency of the energy sector due to the rising demand for energy.
Paul Hoffman, an analyst at Best Brokers, has stated that since the commencement of 2024, U.S. Bitcoin miners have used 20,822.62 GWh of electricity.
This amounts to energy consumption of about 21,000 MW, which, at an average commercial electricity rate of $0.1281 per kWh as of February, costs about $2.7 billion. Hoffman pointed to the scale of this consumption by noting that the energy could charge every electric vehicle in the U.S. 87.52 times.
Global Hashrate Surge Intensifying Energy Demands
Since January, the global mining hashrate has risen by 20%, and thus it will be necessary to invest in specialized ASIC miners.
Currently, the world generates 450 BTC per day, which requires 384,481,670 kilowatt hours of power. This translates to 140,336 GWh annually, a figure that exceeds the electricity consumption of most countries but below the 26 most electricity-intensive nations.
The global mining output for Bitcoin is 116,550 BTC with a value of $8.2 billion for the year to date, and the US miners have produced 44,102 BTC or 37.84% of the global output. The halving event that occurred in April has had a drastic effect on mining energy consumption.
Prior to the event, the power needed to mine one Bitcoin was 407,059.01 kWh at a cost of roughly $52,144.26. After halving, the energy consumption rate has increased significantly, with 862,635.55 kWh required to mine one Bitcoin.
Industry Shift Towards Sustainable Energy Accelerates
While bitcoin mining is currently the world’s only major industry that is predominantly reliant on sustainable energy, this happens while consuming a huge amount of energy. As per the report on The Bitcoin ESG Forecast, the global Bitcoin mining industry’s sustainable electricity utilization was noted to stand at 54.5% in January 2024. This means that sustainable mining practices in 2024 will have risen by 3.6% over the year 2023.
Recent changes in the regulation of the energy sector have positively impacted the move towards green energy sources. Due to the ban on mining in China and the effective prohibition in Kazakhstan, miners have been forced to look for sustainable energy systems, particularly in North America.
Profitability Challenges for U.S. Miners Post-Halving
The cost of mining one Bitcoin has increased significantly since the halving that occurred in the middle of this year. Currently, mining enterprises in the US use approximately $18.65 million in energy per day, with an average electricity rate of $0.1281 per kWh.
Before the halving, American miners were earning approximately 340.82 BTC per day through the consumption of grid electricity, which was possible to turn a profit. However, this has been made very difficult by the reduced block reward that has seen many miners struggling to make profits using only grid power.
The impact of the doubled energy requirement can be seen as a burden for mining companies because it adds to their financial load. The cost of electricity and the need for superior equipment to mine complexes have increased the overhead costs significantly and presented significant pressure to mining firms.
