Bitcoin Mining Profitability Hits Record Lows Amid Price Drop and Increased Hashrate, JPMorgan Reports

Bitcoin mining stocks experienced a decline in the first half of September as the price of Bitcoin, the largest cryptocurrency globally, remained below $60,000. JPMorgan reported this information in a research document released on Monday. The bank highlighted that the Bitcoin network’s hashrate increased, reaching pre-halving levels.

The report mentioned that the hashrate has risen by 4% month-to-date, indicating the total computational power utilized for mining and processing transactions on a proof-of-work blockchain. Hashrate serves as a measure of competitiveness within the mining sector.

Moreover, the hashprice, which reflects miners’ daily profitability, dropped by 2% this month, standing over 50% lower than pre-halving levels. JPMorgan pointed out that this decrease, combined with seasonal factors, might impede near-term hashrate growth.

According to analysts Reginald Smith and Charles Pearce, U.S.-listed miners’ share of the network hashrate surged for the fifth consecutive month, reaching 26.7%, a record high. The total market capitalization of the fourteen U.S.-listed Bitcoin miners tracked by the bank decreased by 3% from the end of August, settling just below $20 billion. Hut 8 (HUT) outperformed with an 11% gain, while CleanSpark (CLSK) underperformed, dropping by 12%.

The report added that the group of publicly listed U.S. miners currently trades at nearly two times their proportional share of the four-year block reward opportunity, compared to an average of 1.6 times since January 2022.

In a separate research report published last week, rival Wall Street bank Jefferies cautioned that Bitcoin miners could face another challenging month in September. The report did not provide any attribution to the original speakers for the quotes mentioned.

In conclusion, the cryptocurrency mining sector, particularly Bitcoin mining stocks, faced fluctuations in September as the hashrate and hashprice exhibited varying trends. The insights provided by JPMorgan shed light on the evolving dynamics within the mining industry, emphasizing the impact of price movements on miners’ profitability and market share.