'We would all be cheering loudly if bitcoin were to get back to $35,000, $40,000. Over certain levels, every dollar increase in the price of bitcoin is 100% operating income to bitcoin miners. Long-term, Levitt is optimistic because there's tremendous positive operating leverage in the business. Levitt tells CNBC they invested the proceeds of approximately $167 million primarily into growth-oriented activities, including new ASIC servers and additional data center capacity for their self-mining and colocation businesses.īut they also deployed some of that capital to repay debt and to help settle five years of employee stock grants. Last month, Core sold 7,202 bitcoin at an average price of $23,000. That's down from 80% margins at its peak. It's still profitable to mine bitcoin, Levitt says, with around 50% margins across the industry. 'We mine and earn or produce bitcoin, but our costs, expenses, and liabilities are in dollars,' said Levitt.

CEO Mike Levitt tells CNBC that just like any other business, bitcoin miners need to pay their bills. 'With high-profile reports of resignations from mining companies, as well as miners that have used their equipment as collateral to borrow money, the bitcoin mining industry could be under growing pressure,' the note continued.Ĭore Scientific, which is one of the largest publicly traded crypto mining companies in the U.S., sold nearly all its bitcoin in June. 'Given rising electricity costs, and bitcoin's steep price decline, the cost of mining a bitcoin may be higher than its price for some miners,' Citi analyst Joseph Ayoub wrote in a note on July 5. Lower bitcoin prices and higher energy costs are compressing profit margins for miners, which is part of why some are selling bitcoin at current prices to try to contain exposure to continued volatility in the sector and mitigate against further risk to their bottom line.

Meanwhile, inflation is on a tear, and the cost of energy is hitting record highs as the war between Russia and Ukraine rages on. Still, the wider crypto market has been in a slump for months, with bitcoin down nearly 70% from its all-time high of around $69,000 in Nov. Bitcoin is currently trading around $21,600, up about 3% in the last 24 hours.

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