How Rising Electricity Costs Contributed to Bitcoin’s Drop to $90K

Bitcoin’s drop from $126,000 to below $90,000 over the past three weeks has left many guessing the reasons. Some point to weaker demand or changing sentiment, while others focus on ETF outflows. Yet one factor often overlooked is the sharp rise in electricity costs in major mining regions.

This has led miners to sell more Bitcoin and rethink their approach. Some are moving their facilities to AI tasks, which is changing the mining industry and the market overall.

Why Do Energy Costs Matter for BTC Price?

Electricity has always been the heart of Bitcoin mining and its biggest cost. Most miners spend 70 to 80% of their budgets on power. After the April 2024 halving cut block rewards to 3.125 BTC, many miners were already near break-even, even with Bitcoin over $100,000. Rising energy prices this year left almost no room for error.

In ERCOT, Texas, the busiest U.S. mining hub, wholesale power prices rose 18% year over year in Q3 2025. Northern Virginia, another key mining region, saw a 13% increase. These are significant jumps that can turn a profitable operation into a loss in a single quarter.

AI data centers are adding to the pressure. Companies like Nvidia and AWS are expanding quickly, stretching power grids. The U.S. Energy Information Administration expects wholesale power prices to rise another 8.5% in 2026, mostly due to data centers. Some analysts compare this to the fracking boom, which quickly reshaped state grids.

Miners now have few choices: reduce operations, find cheaper power, or sell more Bitcoin. The market has already felt the effects.

Miners Are Selling More Bitcoin Than at Any Time Since 2022

One clear sign of stress is the rise in miner-to-exchange transfers. According to CryptoQuant, miners sent about 71,000 BTC to exchanges in the first half of November. In October, another 210,000 BTC moved, one of the largest monthly totals since the 2022 bear market.

The reason is clear. When profits drop, miners need cash. Some costs cannot wait, like cooling equipment, land leases, or debt payments. Marathon Digital, a major public miner, said it sold part of its October and November production to cover expenses. Core Scientific and Iris Energy chose a different approach, signing multi-year AI hosting contracts, which can earn three to four times more per kilowatt-hour than Bitcoin mining.

Bitfarms plans to leave crypto mining by 2027 and convert its 341-MW operations to high-performance computing. The move makes financial sense. AI hosting can offer 70–80% EBITDA margins and steady income, unlike the swings of Bitcoin mining.

When miners sell large amounts, they add supply at a time when demand is cooling. Combined with ETF outflows and higher Treasury yields, this pushed Bitcoin toward $90,000.

How These Pressures Pushed BTC to $90K

The consequences of these structural changes became apparent quickly. More coins from miners met weaker demand. Institutional inflows slowed as Treasury yields rose and ETF buyers pulled back.

Bernstein analysts said the current situation mixes tough post-halving margin pressure with a new energy challenge. Many miners now need Bitcoin to be between $65,000 and $70,000 to break even. If prices fall further, another wave of selling could start.

Some miners are still doing well. Those with very cheap hydro, wind, or nuclear energy, often under 3¢ per kWh, remain profitable. Canada, Scandinavia, and parts of Latin America attract miners looking for stability. About 52% of global mining already uses renewable energy. These miners often hold their coins, easing some selling pressure.

Overall, supply has risen sharply. With fewer buyers, Bitcoin fell below $90,000 for the first time since April, reaching $89,426 before rising slightly.

What Does It Mean for the Market?

Bitcoin’s recent decline has been driven by several short-term pressures, including rising electricity costs, heavy miner selling, and weaker institutional demand. Higher power costs force some miners to sell their holdings to cover expenses, creating temporary downward pressure. In the long term, fewer miners will operate profitably, reducing supply, while mining companies from countries with high electricity costs relocate to regions with cheaper power. These changes will definitely push Bitcoin prices higher in the long run.