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Bitcoin

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Bitcoin mining profitability has reached a new low, <a href="https://www.coindesk.com/markets/2024/09/04/bitcoin-mining-profitability-is-stuck-at-record-lows-jpmorgan-says" rel="noopener noreferrer nofollow">according</a> to a recent research report from JPMorgan. The report, published on Tuesday, highlighted that BTC miners earned an average of $43,600 per exahash per second (EH/s) in daily block reward revenue in August, marking the lowest point on record.
This figure stands in stark contrast to the peak of $342,000 per EH/s in November 2021, when Bitcoin was trading at $60,000, and the network hashrate was significantly lower at 161 EH/s.
The decline in mining profitability has had a notable impact on the stock prices of companies in the sector. The report noted that the total market capitalization of the 14 U.S.-listed mining companies tracked by JPMorgan shrank by 15% month-over-month, down to $20 billion. Of these companies, only three managed to outperform Bitcoin during this period, reflecting the broader challenges facing the industry.
<h2 id="span-style-font-weight-400-rising-network-hashrate-span">Rising Network Hashrate</h2>
One of the key factors contributing to the reduced profitability is the rising network <a href="https://bitinfocharts.com/comparison/bitcoin-hashrate.html" rel="noopener noreferrer nofollow">hashrate</a>, which serves as a proxy for competition and mining difficulty. The network hashrate averaged 631 EH/s in August, an increase of 16 EH/s from the previous month, and just 20 EH/s below the levels seen before the most recent Bitcoin halving event.&nbsp;
Additionally, mining difficulty rose by 9% in August and is now 4% higher than before the halving, further squeezing miner margins.
<h2 id="span-style-font-weight-400-positive-developments-span">Positive Developments</h2>
Despite these challenges, there was a brief positive development in August when transaction fees spiked to as much as 120% of the block reward. While this provided a temporary boost to miner revenue, it was not enough to offset the overall trend of declining profitability.
Moreover, Bitcoin’s annualized volatility also rose sharply in August, climbing to 62% from 45% in July, adding another layer of uncertainty for miners.
Last month, <a href="https://thecoinrise.com/bernstein-reveals-evaluation-of-bitcoin-mining-companies/" rel="noopener noreferrer nofollow">Bernstein, a research and brokerage firm, gave “outperform” ratings</a> to Riot Platforms (RIOT), CleanSpark (CLSK), Iris Energy (IREN), and Core Scientific. It indicated confidence in these companies’ ability to navigate the challenging environment and deliver solid returns for investors.
In a related development, <a href="https://thecoinrise.com/malaysia-crushes-bitcoin-mining-machines-to-combat-power-theft/" rel="noopener noreferrer nofollow">Malaysia made headlines for its aggressive crackdown on illegal Bitcoin mining operations</a>, destroying around 1,000 mining machines valued at approximately $452,500. This action underscores the growing regulatory scrutiny on Bitcoin mining, particularly in regions where power theft and other illicit activities are linked to the practice.
The post <a href="https://thecoinrise.com/bitcoin-mining-profits-plummet-to-record-lows-amid-rising-hashrate/" rel="noopener noreferrer nofollow">Bitcoin Mining Profits Plummet to Record Lows Amid Rising Hashrate</a> appeared first on <a href="https://thecoinrise.com/" rel="noopener noreferrer nofollow">TheCoinrise.com</a>.

Bitcoin Mining Profits Plummet to Record Lows Amid Rising Hashrate

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