Bitcoin mining behavior will always be closely tied to its inherent operational costs, with electricity being its largest expense. Interestingly enough, the cost of electricity to mine one BTC has historically served as a dynamic price floor for Bitcoin since its inception.

So when we consider other expenses such as hardware, wages, rent, insurance, etc, it is easy for the total cost of production to add up quickly, especially in high inflationary environments.

The Capriole Investments indicator shown in the chart above estimates the cost to produce 1BTC from an electrical (purple line) and total (dark blue line) perspective. Even with BTC surging above $30k, the current price still falls short of the total cost of production, which currently sits at $35.5k . This would imply miners are still struggling to turn a profit, despite the recent price increases.

Furthermore, the miner hash price (which is miner revenue/the current hash rate in EH/s) continues to make new lows in BTC, currently at 2.72 per exahash.

However, due to the recent price recovery, miner revenue in USD terms seems to have found a floor. It’s also attempting to break above an 8-month high, where it currently sits around ~$80k per exahash.