When miners calculate profitability, they usually focus on three numbers: the electricity rate, the Bitcoin price, and the hashrate. Those are visible. They show up in dashboards.
What doesn’t appear in most spreadsheets is depreciation. And it’s quietly eroding returns.
What depreciation actually means for ASICs
An ASIC is not a forever asset. It’s a machine with a market price that falls over time, driven by two forces: hardware wear and the constant release of newer, more efficient models.
A Bitmain S19j Pro running at 100 TH/s with 29.5 J/TH was worth around $6,000 at peak in 2021. Today that same machine trades for under $400. The machine didn’t stop working. The market moved past it.
That delta matters enormously when calculating your actual return on capital.
The depreciation problem in numbers
Say you buy a mid-tier miner today for $2,000 with a 24 J/TH efficiency. You lock into a 3-year hosting contract at $0.075/kWh.
Over 36 months, you’re generating BTC revenue and your electricity cost is predictable. But your machine is not worth $2,000 at month 36. It’s worth closer to $400 to $600, assuming no major difficulty spike forces weaker machines offline first.
That $1,400 to $1,600 in value destruction needs to appear somewhere in your math. It doesn’t disappear.
Annualised, that’s roughly $467 to $533 in depreciation per machine per year, before accounting for any BTC price movement.
Why this gets ignored
A few reasons. Most miners think in yield terms: how much BTC am I generating each month? Depreciation is a capital cost, not a cash cost, so it doesn’t hit the wallet directly.
There’s also an optimism bias. People assume their machine will hold value better than historical averages because “Bitcoin is going up.” That may hold in BTC-denominated terms during a bull run, but in fiat terms, ASIC prices have a consistent tendency to fall regardless of market cycle.
And honestly, the industry mostly talks to itself. Forums cover hashprice and pool fees. Depreciation makes the numbers look worse, so it gets underweighted.
The machines that depreciate slowest
Not all ASICs age equally. The pattern is consistent: the most efficient machines on the market at any point in time hold value longest.
The 2026 efficiency leaders have moved well past the previous generation. Bitdeer’s SEALMiner A4 Pro runs at 10.9 J/TH, and their A4 Ultra Hydro pushes below 10 J/TH. Bitmain’s S21 XP sits at 13.5 J/TH. The S21 standard and MicroBT’s M66S, once considered top-tier at 16 to 18 J/TH, are already sliding into mid-tier territory. Anything above 25 J/TH is on borrowed time. Machines in the 18 to 22 J/TH range will still run profitably at most hosting rates right now, but one efficiency generation from now, they become stranded assets.
The best hedge against depreciation is buying efficiency headroom. Not the cheapest machine available today, but the one that will still be competitive two generations out.
What to do with this
Build depreciation into your ROI model from day one. A simple approach: estimate the machine’s residual value in 24 to 36 months (typically 25 to 30% of purchase price for mid-tier hardware), subtract that from the purchase price, and spread the loss across your holding period.
That’s your true cost of capital alongside electricity. When you run those numbers, some deals that looked solid at 5 to 6 cents/kWh start looking thin.
It also changes how you think about used hardware. A machine at 50% of new price may still depreciate at 80% of the new machine’s pace if it’s already mid-tier on efficiency. The discount doesn’t always compensate for the shorter runway.
The miners who survive across cycles are the ones who treat their machines like any other depreciating asset: tracked, modelled, and replaced at the right time.
Depreciation is one piece of a bigger question: what does it actually cost to mine a Bitcoin today? We will break that down in a follow-up post, covering power, hosting, pool fees, and depreciation combined into one all-in cost per BTC.