2025 Cambridge Bitcoin Mining Investment Brief: The Sector is Maturing, Shifting Towards Capital-Intensive

Summary

The "2025 Cambridge Digital Mining Industry Report" (which surveyed about 48% of the total hash rate of the Bitcoin network) shows that Bitcoin mining has evolved into a capital-intensive, energy-centric data center business. The rapid improvement in the efficiency of Application-Specific Integrated Circuits (ASICs), strong institutional capital inflows, and an increasingly green energy structure have become new characteristics of the industry.

1. Scale and Growth - The cumulative electricity consumption in 2024 will reach 138 terawatt-hours (TWh). Energy consumption per unit of workload will decrease by 24%, down to 28.2 joules per terahash (J/TH, a standard efficiency metric).
2. Decarbonization Process - Sustainable energy (renewable energy + nuclear energy) has met 52.4% of the mining load; the annual greenhouse gas emissions amount to 39.8 million tons of CO₂ equivalent (CO₂e), accounting for only about 0.08% of global emissions.
3. Geographical Shift - The United States accounts for approximately 75% of the surveyed report's hash rate (hash rate is measured in EH/s, or exahashes per second). Paraguay, the UAE, Norway, and Bhutan have become secondary hubs.
4. Costs and Profits - The median delivery electricity cost is $45 per megawatt-hour (MWh). Including all other operational expenses (OPEX), the average total cost is $55.5 per megawatt-hour. The high Bitcoin prices in the fourth quarter of 2024 are driving the industry’s "hash power profits" (revenue minus direct electricity costs) to historical highs.
5. Risk Dashboard - Core concerns remain: (i) rising energy prices, (ii) policy uncertainty, (iii) concentration of ASIC supply (Bitmain, MicroBT, and Canaan Creative hold over 99% market share). Common mitigation measures include long-term power hedging, geographical diversification, and vertical energy ownership.

Strategic Highlights: The improvement in energy efficiency, emerging grid service revenues, and sustained institutional demand offset the impact of the block reward halving in April 2024. However, operators must focus on controlling power costs, transparent environmental, social and governance (ESG) reporting, and revenue diversification (AI / high-performance computing hosting, gas flaring utilization) to protect profits before the next halving (2028).

Industry fundamentals

Cybersecurity and Economy

1. 2024 Halving: Block subsidies will be reduced from 6.25 bitcoins per block to 3.125 bitcoins as scheduled. Although transaction fee income accounts for only 6% of miners' income on average, short-term congestion (such as "ordinal" inscriptions) has shown that transaction fees can exceed 100% of the subsidy during peak loads.
2. Security Budget: Although the rewards have been cut by 50%, the global hash rate still rises to 796 EH/s by the end of the year, validating the miners' motivation to reinvest capital.
3. ASIC Roadmap: The latest 5nm and 3nm chip designs (Bitmain S21, MicroBT M66) have a power consumption of less than 20 J/TH. Prototypes with power consumption below 10 J/TH are planned for release in 2025-2026, which means efficiency will double again.

Capital Structure and Public Listing

Approximately 41% of the global hash rate is controlled by publicly listed miners, making a capital structure that combines debt and equity possible. The de-leveraging after 2023 has resulted in most major companies having a net debt to EBITDA ratio of less than 0.5 times.

Environment and ESG performance

| Indicator | Value for 2024 | Change | Remarks | | --- | --- | --- | --- | | Share of Renewable Energy | 52.4% | An increase of 15 percentage points compared to 2023 | 23% Hydropower, 15% Wind Energy, 9.8% Nuclear Energy | | Carbon Intensity | 288 grams of CO2 equivalent per kilowatt-hour | Decreased by 34% compared to 2021 | Global grid average is about 442 grams | | Total greenhouse gas emissions | 39.8 million tons of CO2 equivalent | Decrease of 21% compared to model projections for 2021 | Approximately equivalent to Slovakia's annual emissions | | Demand Response Reduction Amount | 888 GWh | New Key Performance Indicator | Shows the ability to reduce load as required by the grid | | Adoption Rate of Mitigation Measures | 70.8% of Companies | Continuously Rising | Use of Renewable Energy Certificates (RECs), Carbon Offsetting, Waste Heat Reuse, Combustion Gas Projects |

ESG Outlook: The ongoing decarbonization of the US grid, the monetization of natural gas in North America and the Middle East, and the expansion in Northern Europe may reduce the carbon intensity across the industry to below 200 grams of CO2 equivalent per kilowatt-hour by 2027. The debt market has already priced a 50-150 basis points (bp) advantage for miners using more than 50% low-carbon electricity.

Operating Cost Curve —— Interpretation Method

Electricity Cost Quartile (Cents / kWh)

• First quartile ≤ 3.2 cents - Lowest cost 25%: direct hydroelectricity, wind energy, onsite combustion gas or self-generated power; profitable in almost any market.
• Second quartile 3.2-4.5 cents - Long-term Power Purchase Agreements (PPA) in North America or Scandinavia; costs are still low, but modern ASICs are required.
• Third and fourth quartiles 4.5-6.0 cents —— Industrial electricity prices or grid power with moderate discounts; profits are quickly compressed after halving or price drops.
• Fourth Quartile > 6 cents - Top 25% of costs: Retail grid electricity; cut first in bear markets.

ASIC efficiency quartile (J/TH)

• First quartile ≤ 25 J/TH - Latest generation chips, usually with immersion cooling.
• Second quartile 25-30 J/TH——2023 model equipment (such as S19 XP, Shenma M60).
• Third and fourth quartiles 30-40 J/TH——hardware for the years 2021-2022; feasible only under the condition that electricity is ≤4 cents / kWh.
• Fourth quartile > 40 J/TH —— Old mining machines (such as S17/T17); profitable only when electricity is below 3 cents / kWh.

Comprehensive Interpretation: The cost of mining 1 Bitcoin ranges between $14,000 and $36,000. Operators in the lowest quartile (low electricity costs + high efficiency) can "mine and hold" during downturns and monetize grid balancing services; companies in the highest quartile are forced to shut down first when prices drop.

Risk and Regulatory Landscape

| Risk | Likelihood of Occurrence within 12 Months | Potential Impact | Mitigation Strategy | | --- | --- | --- | --- | | U.S. Federal Energy Consumption Tax ("DAME" Proposal) | Medium | Profit margin decreased by 5 percentage points | Disperse computing power to other states/countries; conduct industry lobbying | | European Carbon Tax | Medium | Increase in Capital Expenditure | Relocation to Nordic Hydropower Regions; Signing Long-term Power Purchase Agreements (PPAs) with Zero-carbon Power Plants | | ASIC Supply Disruption | Low - Medium | Hashrate Growth Slowing | Dual-source Procurement, Establishing Inventory Buffers, Strategic Early Ordering | | Bitcoin prices have been sluggish for a long time | Medium | Cash flow is tight | Pre-sell output through forward contracts; shift computing power towards artificial intelligence / high-performance computing (AI/HPC) workloads |

Key Terms

• PPA (Power Purchase Agreement): A long-term contract to purchase electricity at a fixed price directly from a power generator, usually involving renewable energy. It provides price stability and proof of green energy sources.
• FERC: Federal Energy Regulatory Commission (FERC) in the United States; it regulates interstate electricity markets. Its ruling on "flexible load remuneration" may provide miners with payment for nationwide grid services.

Strategic Growth Theme

AI/HPC Integration - Transforming or co-locating mining facilities (high-density power, immersion cooling) for GPU-based artificial intelligence training tasks. Potential revenue: $1.0-1.5 per kWh, compared to approximately $0.35 per kWh for Bitcoin mining.

Vertical Energy Integration - Establish joint ventures with natural gas producers (on-site generators) or renewable energy developers. Goal: Achieve all-in electricity costs < 3 cents / kWh and generate additional income by selling excess power to the grid.

Green Bitcoin Premium - Certification programs (such as the Sustainable Bitcoin Committee) aim to sell "proven green" tokens at a price premium of 1-3%; early adopters gain reputational and financial advantages.

Valuation and Monitoring

• The expected enterprise value / EBITDA (EV/EBITDA) for major North American miners in 2025 is 4.8-6.2 times. The low multiple reflects the remaining policy risks and uncertainties regarding the acquisition of long-term trading fees.
• Price per hash (P/PH): 45 million - 70 million USD. A lower P/PH indicates a lower entry cost for the growth of computing power, but may imply higher operating costs.

Catalysts to watch in the next 12 months

• Net inflows into ETFs in the second half of 2025 > 100,000 Bitcoins - favorable for Bitcoin prices and miner income.
• Large-scale shipments of 16 J/TH ASICs - Beneficial for low-cost miners, putting pressure on older equipment.
• US FERC's decision on flexible load payments - may formally establish grid service revenue.
• Finalization of the EU Crypto Assets Market (MiCA) Sustainability Rules - Increased reporting burden, but enhanced policy certainty.

Investment Conclusion

• Increase the holdings of vertically integrated miners, requiring electricity costs < 0.05 USD / kWh, equipment efficiency < 25 J/TH, and renewable energy proportion > 50%.
• After the clarification of tax regulations in the United States and carbon disclosure in the European Union, neutral / holding only provides custodial services or operators in a single jurisdiction.
• Reducing holdings / avoiding highly leveraged miners, who rely on > $0.07 / kWh electricity grid or > 40 J/TH equipment; their profits will be significantly compressed when the next generation of ASICs arrives.