By The Numbers: How Bitcoin Mining Stacks Up Next To Gold & Oil

The bitcoin mining industry has grown to the point where it is being compared to other similar industries that have been around for longer. However, the operations of bitcoin mining companies with these established commodity-based companies are very different. It is most evident in the way these companies manage their revenue in terms of administrative costs, which differs greatly between mining companies and other commodity-based companies.

Bitcoin miners spend too much

Public bitcoin miners have been shown to spend a much larger portion of their revenue on administration costs. Given the spending patterns of other established commodity-based businesses, bitcoin miners spend a very large percentage on administration.

The average share of revenue spent by bitcoin miners on administrative costs came to around 50%, although this is an industry-wide average. Some have been able to reduce their administrative expenditure while others have been shown to spend almost all of their income on it.


BTC mining firms spend more of their revenue | Source: Arcane Research

A comparison between bitcoin miners, gold mining and the oil and gas industry shows a huge disparity here. In the oil and gas industry, average spending on administrative costs was 2%, while administrative costs in the gold mining industry were 3%.

Why do they spend so much?

Bitcoin mining companies spend a lot on administration, partly because of their youth. Unlike their counterparts in the gold mining and oil and gas industries, they have not had time to reach an equilibrium where their administrative costs would cost only a small fraction of revenue.

Marathon Digital is a miner that uses almost 100% of its earnings. Last year, the company reported revenue of $266 million and spent $259 million on administration. The company offers a generous stock compensation program to its top employees, and since these executives had been able to meet all of their growth targets for the year, the company had to spend $161 million of earnings on compensation of ‘shares only for its executives. Bitcoin Price Chart

BTC trending above $19,000 | Source: BTCUSD on

At the other end of the spectrum, some miners have been able to reduce their administrative overhead. Argo Blockchain was able to reduce its administrative costs from 2021 to 16% of its total revenue, one of the lowest in the space.

Another reason is that the companies are so young and stakeholders have very little oversight over the companies. And because it’s a capital-intensive industry, they can afford those hefty executive stock compensations. However, as the industry becomes more mature, greater shareholder oversight is expected, which will lead to a reduction in the amount of revenue that is spent on administrative costs.

Featured image from TechSpot, charts from Arcane Research and

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