Rising Electricity Rates Impact Bitcoin Mining Profitability Across US States in 2023

Bitcoin mining costs in the United States have increased due to soaring electricity rates, making it less profitable for miners. Electricity is a crucial factor in the process, and the rising rates have driven the cost of mining one Bitcoin to at least $17,000, according to Hashrate Index and Luxor.

Electricity rates vary significantly across different US states, with Hawaii having the highest average residential rate at around 30 cents per kilowatt-hour, while states like Washington and Louisiana have some of the lowest rates. New Mexico has emerged as the most affordable state for Bitcoin mining, with a cost of $16,850 to produce one BTC, while Hawaii is the most expensive at around $114,590.

Power cost to produce 1 BTC across US states. Source: Hashrate Index/Luxor

The increasing electricity consumption of the Bitcoin network has also raised concerns about its environmental impact. Some miners have started exploring alternative energy sources, such as solar and wind power, to reduce their carbon footprint and potentially lower their overall electricity costs.

In addition to rising electricity rates, other factors like the cost of specialized computer equipment, mining difficulty, and the price of Bitcoin also contribute to the increasing mining costs. Miners must continually adapt to changing market conditions to remain profitable, considering the potential energy cost fluctuations and increasing competition in the industry.