Core Scientific Increases Bitcoin Mining Hosting Charges Once More

The company anticipates lower future electricity costs, which will be reflected in its hosting prices.

According to two sources with knowledge of the situation, Core Scientific (CORZ), the biggest bitcoin miner in the world, increased its hosting fees to little under 10 cents per kilowatt hour.
It is the most recent price increase for Core Scientific, which has already increased its rates by 20% to 25% recently due to rising energy expenses. The higher expenses make it extremely harder for miners to break even while the price of bitcoin persistently remains around $20,000.

Data centres provide hosting services to cryptocurrency miners so that clients may keep their mining equipment and generate revenue without having to create the necessary infrastructure. With 22.5 exahashes per second (EH/s) of its own and other people’s computer capacity in its data centres around the United States, Core Scientific operates a hosting and mining company. According to the company’s most recent financial report, hosting operations are actually costing it money lately.

A Core Scientific representative turned down to comment on the specifics, but said that “increased power costs are passed through” to customer base .

Despite the fact that electricity prices have been rising, we anticipate that they will drop once again in the future, which will be reflected in our rates.

“All units outside of the [Bitmain Antminer] S19 XP [go] into negative gross margin territory,” at above 9 cents per kilowatt hour, said Ethan Vera, chief operating officer at mining services firm Luxor Technologies. “If hashprice [the value of 1 terahash/second of computing power per day] trends down we expect it to hit some resistance points as the high-cost operators and low-efficiency miners turn off,” he added.

In a note earlier today, analyst Chris Brendler of investment bank DA Davidson lowered CORZ from buy to neutral, saying it was a difficult call given that the stock is “best-in-class in many areas.” However the miner is at a “significantly more stressed liquidity position than expected” and its hosting business is under stress due to unhedged power and “uneconomic hosting contracts,” Brendler wrote.

Given the sharp rise in natural gas and power costs in the US, finding affordable hosting has become almost difficult. In the meanwhile, European miners have either stopped using electricity or have relocated to the continent’s northern regions in quest of inexpensive energy to remain viable.