August Sees Decrease in Bitcoin Mining Profits, According to Jefferies

Bitcoin mining faced reduced profitability in August compared to July, according to a report by investment bank Jefferies. The bank highlighted that the average bitcoin price dropped over 4% while the average network hashrate increased by about 2.7% during the month.

Jefferies analysts, Jonathan Petersen and Joe Dickstein, noted that September could pose further challenges for miners as bitcoin prices remain below $60,000 and the network hashrate continues to rise. They emphasized that the hashrate serves as a gauge for industry competition and mining complexity.

Despite the challenging economic environment for miners, the bank pointed out that operational efficiency is on the rise. The report highlighted that this summer saw fewer days of extreme heat, leading to improved uptime for major miners. Marathon Digital (MARA) achieved approximately 88% uptime last month, a significant improvement compared to 75% in August of the previous year.

For the top ten bitcoin miners tracked by the bank, implied uptime in the recent month stood at around 83%, compared to 76% a year ago and 79% in August 2022. The report also mentioned that U.S.-listed mining companies contributed a lower share of new bitcoin in August than the previous month, accounting for 19.9% of the total network. This decrease was attributed to public players introducing new capacity at a faster rate than the network’s hashrate growth.

Marathon emerged as the leading miner in terms of tokens mined last month, producing 673 bitcoin. CleanSpark (CLSK) followed closely with 478 BTC. Additionally, Marathon’s installed hashrate remained the largest among the group, with Riot Platforms (RIOT) trailing behind, as per the report’s findings.

JPMorgan, a major Wall Street institution, highlighted that mining profitability hit record lows in the first two weeks of August, as stated in a previous report. The challenges faced by miners in August and the potential difficulties in September underscore the evolving landscape of bitcoin mining economics and the importance of operational efficiency improvements in navigating these turbulent times.