Bitcoin mining back in-the-money following extensive volatility in power prices

Bitcoin mining profitability has returned to in-the-money in the Nordic regions of Norway NO4 and Sweden SE2, which are recognized as the least expensive power pricing zones due to a strong renewable energy generation, S&P Global Commodity Insights Bitcoin Quarq Spread Indices showed.

The Nordics experienced a brief cold snap, with temperatures dropping nearly 5 degrees below average across Norway and Sweden, which led to a spike in power prices to almost Eur203/MWh during peak hours Jan. 22.

Despite this increase, power prices in these regions remained at a discount compared to the broader European power market, which faced significant wind output variability during the week of Jan. 20.

In Germany, wind output fluctuated between 5 GW and up to 40 GW over Jan. 20-24. Meanwhile, in the UK, wind output is forecast to rise above 13.5 GW due to Storm Eowyn, a notable increase from just below 1 GW on Jan. 22.

Higher renewable output across Europe and the UK has contributed to an easing in power prices in the second half of week 4, but hourly spikes were notable early in the week. Germany hourly peak power price spiked to Eur584.50/MWh Jan. 20, while the UK saw hourly peak prices soar to Eur1,159.29/MWh on Jan. 22.

Similarly, both Finland and Denmark have also experienced notable power price volatility since the beginning of the year.

Meanwhile in the US, bitcoin mining profitability in both the ERCOT West Hub and SPP South Hub has returned to a range-bound, in-the-money profitability above $40/MWh.

The Commodity Insights Renewable Bitcoin Quarq Spread Index represents bitcoin mining profitability based on grid-based delivered electricity, accounting for renewable certificates across 43 regions in the US and Europe.

On Jan. 22, US President Donald Trump announced the Stargate joint venture partnership between OpenAI, Oracle and Softbank, with plans to invest up to $500 billion in AI data center infrastructure. The initial investment is set at $100 billion, with additional capital allocated over the next four years.

Prior to the inauguration, the Softbank CEO announced an investment of $100 billion in AI infrastructure, which is expected to increase to $200 billion, bringing the total announced investment to $700 billion.

The Bitcoin energy consumption index has experienced some volatility in the second half of January, rebounding after falling to a two-week low from an all-time high earlier in the month.

The index reflects energy consumption per bitcoin mined using a standard graphic card Antminer S19 Pro, which has an average 110 TeraHashes per second (TH/s), consuming 3.25 kW.