A new debt era for Bitcoin miners marked by a single ZetaHash milestone – Report

Bitcoin mining crossed the ZetaHash threshold in September with an average network speed of 1.034 ZH/s, and the hash price fell below $47 per second per PH.

According to a new report from The MinerMag, coinciding with the increase in difficulty, the value of miners’ equity has nearly doubled since August, to around $90 billion by October 15, while BTC has fallen 3.7% over the same period.

The center of gravity in this space is shifting toward balance sheet capacity, convertible debt, and high-performance computing contracts. Record-breaking difficulties have put pressure on operating margins, and power rates remain locked in around fixed-rate contracts.

Despite hash prices returning to levels last seen in May, the total market capitalization of listed operators increased from about $41 billion in August to $58 billion in September and $90 billion in mid-October, according to the report.

This repricing tracks the narrative of digital infrastructure exposure, with miners presenting contracted power, data center ramp-up, and AI colocation as sources of incremental revenue that are less tied to reward encumbrances.

According to MinerMag’s Performance Panel, leaders over the past month included Bitfarms with a 162 percent increase, Canaan with a 149 percent increase, and CleanSpark with a 125 percent increase. During the same time period, MARA rose 39%, Riot rose 32%, and BTC fell 3.7%.

As fleet size increased, production league tables were reorganized.

According to MinerMag’s September snapshot, MARA achieved 53.3 EH/s, about 88% of its deployed capacity, mined 736 BTC and sold about half. Bitdeer increased its realized hashrate by a third to 32.7 EH/s, moving it to the fifth slot. Meanwhile, HIVE reached 19.3 EH/s and Cipher reached 18.2 EH/s, both approaching the 20 EH/s threshold that currently unofficially defines the upper middle tier.

These levels set the backdrop for consolidation, site replacement, and power density upgrades for carriers to qualify for hyperscale AI leases that require long-term, low-interruption power.

Funding is another pillar of the new structure. Miners raised more than $1 billion through convertibles in the second quarter and have already raised nearly $3 billion in the third quarter, with issuers spanning Cipher, MARA, and TeraWulf. IREN raised $1 billion, Terrawolf outlined plans for $3.2 billion in senior secured notes, and BitFarms proposed $300 million in convertible notes.

The structure of this cycle is different from 2021’s ASIC and infrastructure-backed loans, which were later impaired. That’s because today’s zero-coupon convertible bonds generate cash interest in the short term, leaving the door open for equity conversion.

The trade-off is clear: If equity momentum slows, the focus will be on maturities 24 to 36 months out, and the sector will face either dilution from going cashless or cash settlements from falling stock prices.

Rig-level economics underpin the discussion.

Using The MinerMag’s base case of $0.06 per kWh of electricity, the revenue is close to $0.054 per TH per day. The payback period is approximately 458 days for the S19XP+ Hyd and approximately 900 days for the S23 Hyd over an efficiency band of 9.5 to 19 J/TH, further reinforcing the gap between the latest generation on-curve fleet and the earlier generation fleet.

The report’s rule-of-thumb elasticities suggest that a 10% per day change in revenue per TH will move recovery rates by approximately 10-15%. This is because while the short-term capital investment per TH is fixed, the operating costs associated with Joules per terahash are dominant.

Due to this sensitivity, the 4 percent difficulty reduction flagged for the next adjustment is likely to be short-lived, with difficulty and BTC path being the main variables.

Operationally, the ZetaHash regime raises the bar for power procurement, power reduction strategies, and efficiency improvements.

Operators with less than $0.05 per kWh or insufficient joules per terahash of the latest generation will face margin compression until BTC reprices or continued hardship relief is achieved.

MinerMag’s scenario outlines three near-term paths forward from today’s standards. If the difficulty increases further and BTC remains flat, the hash price will drop by 10-20% and the payback for a typical air-cooled fleet will be extended by 2-6 months. If flagged difficulty easing arrives with only a small BTC bounce, a 5-10% tailwind will appear and disappear. If difficulty remains flat and BTC rises, a 15-25% increase in hash price will pull less efficient rigs back toward mid-cycle payback, using the base table as an anchor.

The story for the stock now hinges on the execution of non-mining revenues.

MinerMag’s recent pipeline items include a $3 billion AI hosting initiative related to Google-backed Cipher, expanded credit support for CleanSpark’s high-performance computing push, construction of Galaxy’s $460 million Texas site framed as an AI hub, and a $14 billion pegged Nscale and Ionic Digital deal in conjunction with Microsoft.

While these goals are large, they require interconnects, transformers, and compute tenants to arrive on time and disclosures to turn headlines into run-rate revenue. If the ramp-up schedule is delayed, the story for stocks built on data center optionality will once again converge towards the BTC beta.

Jurisdiction increases dispersion. MinerMag cites new capacity in Norway and Bhutan based on hydro-rich frameworks, and Laos exploring dam-linked mining finance, each shifting the global cost curve by moving incremental exahash into lower-cost buckets.

At the same time, idiosyncratic risks, from U.S. state litigation such as the Kentucky case to investigations into individual operators in Europe, create a broader distribution of multiples as investors price in regulatory and legal differences due to geography and corporate governance.

Simple runway lenses tie the pieces together.

Maps third-quarter and fourth-quarter convertible issuers to 18- to 36-month reference clocks.

If all goes well, the stock will rise above the conversion price and the cashless conversion will eliminate debt while simultaneously funding capital investment in new locations and high-efficiency rigs.

In a downtape, a company issues stock at a depressed stock price or holds onto cash for settlement, reducing capital investment for growth.

Both paths feed back into network difficulties. This is because today’s capacity additions will raise the baseline difficulty in 3-6 months and cause the hash price to fall unless BTC outpaces the expansion.

MinerMag’s cycle descriptions illustrate this reflexivity. This means equity increases, trading windows open, capacity increases, difficulty increases, and margins are squeezed each turn until BTC or fees absorb the difference.

For operators competing at 20 EH/s or beyond, scale and power quality provide options such as load balancing between mining and AI tenants, financial strategies for holding and selling BTC, and the freedom to pause or accelerate expansion in response to power market fluctuations.

MinerMag’s September table shows that MARA is selling about half of its monthly BTC production, a stance that adds operating cash while preserving some of its BTC beta. Some are leaning more toward issuance, site-level debt, or colocation upfronts. If the hash price falls below the current baseline, the dispersion of choices will determine who can maintain payback within the 500-700 day range.

This number, combined with the funding behind it, has priced the industry as an infrastructure with the torque of cryptocurrencies.

Hashrate has moved into a more high-pressure zone, stock prices have been valued relative to production capacity and AI pipelines, and debt stacks have moved into convertibles with clear borrowing facilities.

MinerMag assumes that the immediate catalyst is limited to potential single-digit hardship mitigation, with economics still supported by electricity at $0.06 per kWh and revenue near $0.054 per TH per day.

The near-term challenge for miners is to absorb the ZetaHash baseline while converting announced data center projects and balance sheet firepower into stable non-mining revenue.