Bitcoin Mining Report: Institutional Involvement and Hashrate Increase Impact Profits
Bitcoin Mining Report – September 11, 2024 – Bitcoin mining experienced a significant drop in profitability in August compared to July, according to a recent research report by investment bank Jefferies. The bank forecasts that September could present additional difficulties for miners as Bitcoin prices remain below $60,000 and the network hashrate continues to climb.
Decrease in Mining Profitability
Jefferies’ report highlights that Bitcoin (BTC) mining profitability in August was notably less than in July. The average Bitcoin price fell by over 4% in August, while the average network hashrate increased by approximately 2.7%. As a result, the miner’s average daily revenue per exahash dropped by 11.8% compared to the previous month.
Challenges for September
Analysts Jonathan Petersen and Joe Dickstein from Jefferies indicated that September is likely to be another tough month for miners. With BTC prices staying below $60,000 and the network hashrate continuing to advance, the conditions for mining are expected to remain challenging. The Bitcoin hashrate serves as a proxy for industry competition and mining difficulty.
Improved Operational Efficiency Despite Lower Profitability
Although mining economics are facing headwinds, operational efficiency among miners is improving. Jefferies noted a reduction in days of extreme heat this summer, which led to better uptime for major miners. Marathon Digital (MARA), for example, achieved approximately 88% uptime last month, a significant increase from 75% in August of the previous year.
For the ten largest Bitcoin miners tracked by Jefferies, the implied uptime last month was around 83%, compared to 76% a year ago and 79% in August 2022. This improved efficiency indicates that while profitability is declining, operational performance is on an upward trend.
Market Share and Mining Performance
In August, U.S.-listed mining companies mined a smaller share of new Bitcoin compared to the previous month. They represented 19.9% of the total network, as public players accelerated new capacity expansion faster than the increase in the network hashrate. Marathon led the mining activity with 673 BTC, followed by CleanSpark (CLSK) with 478 BTC. Marathon continues to have the largest installed hashrate, followed by Riot Platforms (RIOT).
Historical Low Profitability
The report also referenced a note from Wall Street giant JPMorgan, which indicated that mining profitability fell to all-time lows during the first two weeks of August. This highlights the continuing pressures faced by miners in the current market conditions.
FAQ
Why did Bitcoin mining become less profitable in August?
Bitcoin mining profitability decreased in August due to a drop in the average Bitcoin price, which fell over 4%, combined with a rise in the average network hashrate by about 2.7%. This led to an 11.8% decrease in miners’ average daily revenue per exahash.
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