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A research report released on Monday by investment bank Jefferies indicated that Bitcoin miners saw a minor recovery in June, as Bitcoin’s price rose by 2% while the overall Bitcoin hashrate fell by 5%.
This came after a difficult May, when Bitcoin mining profitability hit a record low due to downward pressure on Bitcoin prices and fierce competition within the industry.
Understanding Bitcoin Mining Profitability
“June represented a phase of slight recovery from the immediate effects of the halving, which were most pronounced in May,” noted analyst Jonathan Petersen.
As of July 6, the total hashrate for Bitcoin was recorded at 573 exahashes per second (EH/s), with one exahash equating to one quintillion hashes, as per Blockchain.com.
Hashrate serves as an indicator of competition in mining; a higher total hashrate typically results in reduced profitability for individual mining operations.
Additional factors affecting profitability include the earnings of Bitcoin miners and the prevailing market price of BTC at that moment.
The interaction of these elements plays a crucial role in determining the profitability of Bitcoin mining ventures.
On April 19, the Bitcoin network underwent its fourth halving event, which decreased the minimum BTC reward per block from 6.25 BTC to 3.125 BTC.
Alongside a price drop, this event caused Bitcoin’s “hashprice” – a vital metric for Bitcoin mining profitability – to reach an unprecedented low on May 1.
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Bitcoin price now around average cost to mine Bitcoin at the halving across all miners. This is a signal we are at the bottom. pic.twitter.com/akFOVTL6Q8
— MartyParty (@martypartymusic) July 7, 2024
However, the decline in profitability led many less efficient miners to shut down, allowing more efficient operators to take advantage of the situation and increase their market share in Bitcoin mining.
Performance of Public Miners
Jefferies noted that publicly listed miners in the U.S. boosted their Bitcoin mining production in June, capturing 20.8% of the network share, up from 19.1% in May.
Marathon Digital (MARA), the largest miner, produced 590 BTC in June, which is a 4% decrease compared to May.
Despite lowering Marathon’s price target from $24 to $22, the bank retained its hold rating for the company.
In contrast, CleanSpark (CLSK) mined 445 BTC, reflecting a 7% increase from the prior month.
The report also pointed out a trend among Bitcoin mining firms to broaden their revenue sources by entering the high-performance computing sector.
This strategy takes advantage of the growing demand for artificial intelligence and cloud computing infrastructure.
“The decline in Bitcoin mining profitability, worsened by recent halving events, has driven this strategic transition,” Petersen explained.
The post Bitcoin Mining Profitability Bounced Back In June: Jefferies Report appeared first on Cryptonews.
