Bitcoin mining profitability plunges as power prices rise on higher demand

Bitcoin mining profitability rates plunged across Europe as an end-of-November cold snap pushed day-ahead power prices higher due to rising demand, S&P Global Commodity Insights data showed.

Bitcoin Renewable Quarq Spreads in Germany and France fell to negative Eur90/MWh as French power demand hit 70 GW. Meanwhile in Germany coal and lignite output ramped up to 27 GW to meet the increase in demand, the highest since the last winter.

Germany/Belgium reverted to imports from France during evening peaks, that in turn turned to rare imports from Italy and Switzerland in addition to steady flows from Spain.

Baseload day-ahead power price in Germany and France both averaged around Eur169/MWh Nov. 30. Meanwhile, hourly power prices across the Central Western Europe region spiked to Eur250/MWh during evening peak hours on Nov. 29, the highest since last winter, exchange data showed.

Spanish day-ahead power prices were more resilient over the last week, with prices peaking at Eur107.9/MWh Nov. 27, and settling range bound within Eur80/MWh and Eur100/MWh between Nov. 29 – Dec. 1.

Bitcoin Renewable Quarq Spreads have been in-the-money in Norway NO4 and Sweden SE1 from Nov. 22, while profitability rates in Finland have been volatile. In Finland, a bidding error by a market participant on Nov. 23 saw Finland power prices settle at negative Eur500/MWh, which resulted in a Eur315.57/MWh profitability for bitcoin miners, Bitcoin Renewable Quarq Spreads index data showed.

Finland's 1.6-GW Olkiluoto 3 (OL3) nuclear power plant was scheduled to resume power production late Nov. 30 after the new 1.6-GW reactor suffered a second outage this fortnight on Nov. 29.

A shift to colder weather could maintain power prices high in the Nordic countries, which will result in lower bitcoin mining profitability.

Platts assessed the Bitcoin Energy Consumption Index at 384.04 MWh Nov. 30, down from a peak of 399.48 on Nov. 26.

Platts is part of S&P Global Commodity Insights. Platts Bitcoin Renewable Quarq Spreads are assessed across 42 locations in Europe and the US.