Mining or Buying Bitcoin? Which Is More Profitable for Investors Today?

Bitcoin mining once seemed like an almost fairy-tale way to acquire cryptocurrency — just turn on your computer, let it run, and gradually collect BTC. By 2026, the reality is completely different. Mining has become a global industry in which players compete over fractions of a cent in electricity costs and the most efficient hardware. Profits can still be made. For the average investor, however, the far more important question is whether mining makes sense for them specifically.

The price of Bitcoin can rise by tens of percent and headlines may speak of a new crypto boom, yet a miner does not automatically earn tens of percent more. A miner's bottom line is shaped by the price of electricity, the performance and efficiency of their equipment, and the mining difficulty, as well as the total computing power of the Bitcoin network and transaction fees.

That is precisely why two people can mine the same Bitcoin at the same moment and arrive at completely different results. For one, mining may be a profitable business; for the other, a machine that day after day produces nothing but a high electricity bill.

What actually happens when Bitcoin is mined?

Bitcoin has no central bank and no single company controlling all transactions. Its network operates in a decentralized way, and miners are one of its fundamental components. Using specialized devices, they perform an enormous number of calculations and compete for the right to create the next block of transactions.

A successful miner receives what is known as a block reward. This consists of newly created bitcoins and the transaction fees paid by network users. Bitcoin has a built-in mechanism that gradually limits the number of newly issued coins. This so-called halving occurs every 210,000 blocks, roughly once every four years.

Following the halving in April 2024, the base reward fell from 6.25 BTC to the current 3.125 BTC per block found. The next halving is expected around 2028, after which the reward will drop to 1.5625 BTC.

This is fundamental to the economics of mining. At regular intervals, miners receive fewer newly created bitcoins for the same work. For their operations to remain profitable, they must offset this decline — for example through a higher BTC price, more efficient technology, cheaper electricity, or greater income from transaction fees.

The Bitcoin price alone is not enough. What matters is the hashprice

For the average investor, it may come as a surprise that the BTC price itself is not the best indicator of how miners are currently doing. The industry therefore tracks a metric known as hashprice. In simple terms, it expresses how much revenue a given amount of mining power can generate in a single day.

Hashprice reflects the Bitcoin exchange rate, mining difficulty, the size of the block reward, and transaction fees simultaneously.

In mid-August 2026, according to data from Hashrate Index, hashprice was hovering around $31.89 per PH/s per day. At the same time, the seven-day average computing power of the Bitcoin network was approximately 920 EH/s, and difficulty reached 127.48 trillion.

This is where the fundamental paradox becomes clear. A rising Bitcoin price does increase the dollar value of miners' rewards, but it can also attract fresh capital into the sector. New machines connect, the total network power rises, and competition for each block intensifies. Moreover, Bitcoin regularly adjusts mining difficulty to preserve a roughly ten-minute interval between blocks over the long term. A higher BTC price therefore does not automatically mean every miner suddenly earns significantly more.

Why does mining pay off for a large farm but usually not for someone at home?

Professional miners operate in a completely different energy world than an ordinary household. They are not simply looking for a country where electricity is generally cheap. They seek out specific locations, long-term contracts, surplus production capacity, or energy sources capable of offering very low prices.

An extensive study by the Cambridge Centre for Alternative Finance found that electricity accounts for more than 80 percent of cash operating costs at mining companies. Survey respondents reported a median electricity price of around $45 per MWh, equivalent to approximately 4.5 cents per kWh. When additional related costs were included, the median reached $55.50 per MWh.

For comparison, consider European households. According to Eurostat, the average final electricity price for households in the European Union in the second half of 2025 was approximately €0.29 per kWh.

This is of course a different type of customer and a different kind of contract than an industrial mining farm. But this comparison clearly illustrates why home mining in Europe is so economically challenging.

If, for example, an Antminer with a performance of around 200 TH/s were operated at a price close to the European residential average, electricity alone for its continuous operation would cost over €24 per day. Gross mining revenue at our model hashprice would amount to just over six dollars. Mining would not even cover the electricity costs. Every day would generate a significant loss.

An ASIC is not an investment you buy and forget about for ten years

Another problem comes with the hardware. Bitcoin is no longer effectively mined on a standard personal computer or a conventional graphics card. Professional mining uses specialized ASIC devices designed specifically for SHA-256 algorithm calculations.

Their development has not stopped. Newer generations can deliver greater computing power at similar power consumption. Older devices may therefore not stop working technically — but they can stop working economically.

This is an important distinction for an investor compared to holding Bitcoin directly. If someone buys BTC today and stores it securely, the coin itself will not become technologically obsolete in two years. With mining equipment, that is one of the main risks.

A machine may be profitable under today's conditions, but rising difficulty and the arrival of a more efficient generation of ASICs can gradually push it below the profitability threshold. The owner then faces a choice: continue operating it with ever-shrinking margins, move it to a cheaper energy source, or buy new equipment. Mining is therefore not simply a bet on Bitcoin. It is simultaneously a bet on energy prices, semiconductor development, and the future competitive landscape.

The next halving will raise the pressure even further

Each successive halving sharpens this competition further. If around 2028 the base block reward drops from 3.125 BTC to 1.5625 BTC, miners will again receive only half the newly issued coins for new blocks.

This does not mean their income will necessarily be cut in half overnight. In the meantime, the price of Bitcoin, network difficulty, and fee levels may all shift significantly. Some inefficient machines may also disconnect once economic conditions worsen, which will in turn partially improve conditions for the remaining miners.

The long-term trend is clear, however. Bitcoin is gradually reducing the number of new coins with which it funds network security. Transaction fees should therefore play an increasingly important role in the future. At present, that transition is still a long way off. In the week ending August 17, 2026, transaction fees accounted for only approximately 0.69 percent of total block rewards for miners, according to Hashrate Index.

For the average investor, the key question arises: why not simply buy Bitcoin?

Someone who wants exposure to the Bitcoin price has two very different options. They can use their money to buy BTC and almost instantly acquire an asset whose value will then be determined by market developments. Or they can buy mining equipment and start producing bitcoin gradually.

The second option, however, means the investor must first spend part of their capital on hardware. They must then cover electricity and operating costs every month, while also bearing the risk of rising difficulty, a falling BTC price, and technological obsolescence of the machine. That is precisely why it is wrong to think of mining simply as another way to buy Bitcoin. Mining is a business.

It begins to make sense primarily when the investor has some specific competitive advantage. A typical example is exceptionally cheap electricity, access to surplus energy, one's own generation source, or infrastructure that allows machines to be operated more cheaply than the competition.

Without such an advantage, a home miner is competing against professional firms whose core business is precisely the optimization of every watt of electricity.

So is Bitcoin mining still profitable?

Yes. If it were not, almost no one would be doing it and the computing power of the Bitcoin network would be falling dramatically. In mid-August 2026, however, its hashrate was still hovering around 920 EH/s, indicating that an enormous amount of computing capacity is engaged in securing the network.

The question, however, is not whether anyone profits from mining. The question is under what conditions it is possible to profit. And here the answer is considerably less appealing. Under current conditions, Bitcoin mining is primarily an industrial business with very tight economics. A few cents' difference in the price of a kilowatt-hour can determine whether a single machine generates a profit or a loss.

For the average Czech investor who wants to plug an ASIC into a socket and pay a standard residential tariff, mining therefore rarely makes economic sense. If their primary goal is to benefit from any future appreciation of Bitcoin, buying BTC directly is a simpler and generally far more transparent path.

The content of this article is for informational purposes only and does not constitute investment advice or a recommendation to purchase any specific asset. Investing in crypto assets carries a high level of risk. The value of crypto assets can fall as well as rise, and you may lose the entire amount you have invested. Crypto assets are not protected by deposit guarantee schemes. Past returns are not a guarantee of future results.