New Mexico is the cheapest US state to mine bitcoin in terms of average cost of electricity, while Hawaii is the most expensive.
to bitcoin miners BTC€26,697 It now costs them at least $17,000 to produce one BTC in the US , up from $5,000-10,000 a year ago, according to bitcoin mining data resources Hashrate Index and Luxor .
The bitcoin hashprice has fallen by 58% in a year
Unsurprisingly, rising electricity rates in every state in the United States have contributed to rising bitcoin mining costs .
In particular, between January 2022 and January 2023, the commercial electric rate rose an average of 10.71% per US state , above the average rise in the Consumer Price Index of 6.4%.

Coupled with bitcoin’s declining performance in 2022 , which saw a peak drop from around $48,000 to less than $15,000, it’s clear that active miners generated consistent losses due to rising operating costs and lower returns .
But that changed in the first quarter of this year when miners’ hashprice, or the price in USD per tera-hash per second per day (TH/s/d), rose 31% thanks to bitcoin’s price recovery. around $30,000 .
“As bleak as the new year looked, the lowest day for USD hashprice in Q1 was January 1 ,” the Hashrate Index researchers note, adding that:
“From there, the 70% rise revived the bitcoin price during the quarter, and with it, the hashprice.”

Which state is the cheapest and which is the most expensive to mine Bitcoin?
New Mexico turned out to be the cheapest and, in turn, most profitable state for bitcoin miners in the first quarter , with $16,850 to mint one BTC. On the other hand, Hawaii was the most expensive, at USD 114,590.
By region, the southern and midwestern US states are the most attractive to miners in terms of electricity .

More recently, some US states, such as Arkansas , Montana , Missouri , and Mississippi, among others, have taken concrete steps to protect cryptocurrency miners from excessive taxes and regulations . On the other hand, Texas has amended its utility and tax codes, tightening restrictions for cryptocurrency mining companies.
Energy deflation could increase the profitability of miners
On the other hand, some researchers expect bitcoin mining margins to grow further based on energy price deflation expectations from the US Energy Information Association (EIA).
For example, the agency expects electricity demand to fall 1% in the second quarter , citing additional generation from renewable sources and cheaper natural gas prices. In addition, he expects natural gas prices to remain below $3 in 2023 instead of the average $6.45 in 2022.

Bitcoin mining stocks look attractive
Lower operating costs could help cash-strapped bitcoin mining companies survive into 2023 . For example, the stock price of Core Scientific , an already bankrupt bitcoin mining company, has jumped more than 450% YTD (year-to-date).
Similarly, the HI Crypto Mining Stock Index has soared more than 100% this year, showing a return in investor appetite for mining company stocks .

The Hashrate Index researchers noted that:
“If the bitcoin price were to rise an additional 40% to reach $42,000 this year, most mining stocks would rise more than 50% from the current level, while the four to five biggest gainers would soar more than 150 %”.