New Mexico Emerges as Cheapest State for Bitcoin Mining in Q1 2023, while Hawaii Takes the Top Spot for Most Expensive

CJ - Bitcoin Specialist

New Mexico is the most cost-effective state in the United States for Bitcoin mining based on average electricity costs, with Hawaii being the most expensive, according to data from Bitcoin mining resources Hashrate Index and Luxor. The cost of mining one BTC in the US has risen to at least $17,000, up from $5,000-$10,000 just a year ago. This increase in cost is due to the surge in commercial electricity tariffs from January 2022 to January 2023, which surged an average of 10.71% per state, exceeding the 6.4% average surge in the Consumer Price Index. As a result, active miners have suffered consistent losses due to rising operational costs and lower returns.

However, in Q1 2023, miners' hash price rose by 31% as the US dollar price per terahash per second per day (TH/s/d) rose to $30,000. New Mexico is the most cost-effective state to produce one BTC, costing $16,850, while Hawaii is the most expensive at around $114,590. According to researchers, the mining margins are expected to increase further based on the Energy Information Association's expectation of energy price deflation, which could boost profitability for miners.

Regarding electricity prices, the southern and midwestern US states are the most alluring to miners. Additionally, some US states have taken action to safeguard cryptocurrency miners from onerous taxes and regulations, including Arkansas, Montana, Missouri, and Mississippi. Texas, in contrast, has strengthened controls for cryptocurrency mining businesses by revising its tax and utility codes. Cash-strapped Bitcoin investment mining companies can now survive in 2023 thanks to decreasing operational costs, and it is clear that investor interest in mining equities has returned. For instance, the HI Crypto Mining Stock Index has increased by over 100% this year, while Core Scientific, an already bankrupt Bitcoin mining company, has had a year-to-date stock price increase of almost 450%.

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