In a Q3 2025 recap published on Wednesday, J.P. Morgan analysts Reggie Smith and Charles Pearce reported that the second half of 2025 marked a transformative period for bitcoin miners as operators diversified into AI/HPC, while noting the rising energy costs and revenues of the US-dominated bitcoin mining industry.
Bitcoin miners spent a record $2.1 billion on energy in the third quarter of last year. This figure increased by $150 million quarter-over-quarter and by $520 million compared to the prior year period. The rise in energy spending was driven by continued network hashrate growth but was partially offset by improving machine efficiency.
Network hashrate increased by approximately 82 EH/s in the third quarter. This represented an acceleration from the 75 EH/s increase observed in the second quarter. The report estimated that the average efficiency of the network hashrate improved to 21.5 J/TH in the third quarter from 22 J/TH in the prior period.
Aggregate mining gross profit improved sequentially in the third quarter despite continued growth in network hashrate. The industry generated approximately $2.7 billion in gross profit dollars with gross margins of 57%. J.P. Morgan attributed the profitability to higher bitcoin prices and improved fleet efficiency which outpaced increased difficulty. The average price of bitcoin was approximately $114,300 during the third quarter of 2025.
Operators deployed approximately $650 million in capital expenditures, deposits, and mergers and acquisitions in the third quarter. This total decreased by roughly $260 million quarter-over-quarter. J.P. Morgan noted that capital allocation shifted from pure mining rig purchases toward high-performance computing infrastructure buildouts planned for 2026.
Indeed, as the report highlights, however, the end of 2025 for the bitcoin mining sector will be remembered for the AI deals inked by publicly traded bitcoin miners.
Cipher (NASDAQ: CIFR) entered into 600 MW of gross colocation agreements with Fluidstack and Amazon Web Services during the period. IREN (NASDAQ: IREN) signed a 200 MW cloud agreement with Microsoft and announced plans to expand its graphics processing unit fleet to approximately 140,000 units. The report noted that this pivot drove a new cycle of capital expenditure as operators prepared for large-scale infrastructure buildouts in 2026.
Cipher and IREN recorded the lowest power costs per coin at approximately $38,800 and $39,500 respectively. The report indicated that MARA (NASDAQ: MARA) remained the highest cost producer with power costs of approximately $67,700 per coin. MARA paid approximately $89,500 per coin when including cash selling, general, and administrative expenses. Cipher remained the leader on a fully loaded basis with costs of $60,300 per coin.
MARA mined the most bitcoin among the covered operators with 2,144 coins produced in the third quarter. IREN reported the largest quarterly increase in production at 12% following a 17% increase in average hashrate. Cipher produced 553 coins during the same period. CleanSpark (NASDAQ: CLSK) earned $91 million in cash operating profit to lead the coverage universe.
The five operators in the coverage universe issued approximately $980 million in equity via at-the-market offerings in the third quarter of 2025. This figure represented an increase of roughly $390 million from the second quarter. IREN raised $618 million to fund data centers and GPU purchases. CleanSpark did not raise any equity for the third consecutive quarter.
Header image by Andrey Metelev via Unsplash.
