Core Scientific Again Raises Bitcoin Mining Hosting Rates

The firm expects power costs to decline in the future, which will be reflected in its hosting rates.

AccessTimeIconOct 21, 2022 at 9:00 p.m. UTC
Updated May 9, 2023 at 4:00 a.m. UTC

The world's largest bitcoin miner, Core Scientific (CORZ), raised its rates for hosting other companies' machines to just under 10 cents per kilowatt hour, two people familiar with the matter told CoinDesk.

It's the latest price hike for Core Scientific, which had previously raised its rates by 20%-25% in recent months because of soaring energy costs. With the price of bitcoin stubbornly hanging around in the $20,000 area, the boosted costs make it even more difficult for miners to break even.

  • SEC's Gensler Was 'Consistent' Despite Being 'Fried Like a Chicken' Before the Senate: Kevin O'Leary
    SEC's Gensler Was 'Consistent' Despite Being 'Fried Like a Chicken' Before the Senate: Kevin O'Leary
  • Bitcion Mining Is 'Real Estate' Play: Kevin O'Leary
    Bitcion Mining Is 'Real Estate' Play: Kevin O'Leary
  • Kevin O'Leary on Institutional Demand for Spot ETH ETFs
    Kevin O'Leary on Institutional Demand for Spot ETH ETFs
  • What's Kevin O'Leary's Best Investment Ever?
    What's Kevin O'Leary's Best Investment Ever?
  • Hosting is a service that data centers provide to crypto miners so that customers can store their mining rigs and mine digital assets for a fee without having to build the infrastructure themselves. Core Scientific has both a hosting and mining business, with 22.5 exahash/second (EH/s) of its own and others' computing power in its data centers across the U.S. The company is actually losing money of late on hosting operations, according to its most recent earnings report.

    A Core Scientific spokesperson declined to comment on the specifics, but said that "increased power costs are passed through" to customers ... While the cost of power has been on the rise, we do expect power costs to decline again in the future, which would be reflected in our future 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.

    Analyst Chris Brendler at investment bank DA Davidson downgraded CORZ from buy to neutral in a note earlier today, saying it was a tough decision given it is the "best-in-class in many ways." 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.

    Cheap hosting has become next to impossible to find in the U.S. as electricity prices have increased significantly along with the price of natural gas. Meanwhile, miners in Europe have either powered off or are moving to the northern parts of the continent in search of cheap power to stay afloat.


    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Eliza Gkritsi

    Eliza Gkritsi is a CoinDesk contributor focused on the intersection of crypto and AI.