Bitcoin (BTC) 
$101,091 miners have reported an increase in daily earnings and gross profits for the second consecutive month, reaching their highest levels since April. A research report published by JPMorgan on Monday indicates that the largest cryptocurrency‘s rally has outpaced the growth in the network’s hashrate, leading to increased mining profitability.
Revenue and Profit Increase
JPMorgan estimates that Bitcoin miners earned an average of $57,100 per exahash in daily block rewards last month, marking a 10% increase compared to November. However, analysts Reginald Smith and Charles Pearce noted that “daily revenue and gross profit per EH/s is still 43% and 52% below pre-halving levels, respectively.”
Hashrate and Mining Difficulty
The network’s hashrate increased by 6% in December, reaching an average of 779 EH/s. The JPMorgan report stated that the hashrate growth is expected to be 54% in 2024, which is lower than the 103% increase observed in 2023. Additionally, mining difficulty rose by 7% from the previous month, being 27% higher than the levels prior to the reward halving in April.
Market Capitalization and Performance
The total market capitalization of the 14 publicly traded Bitcoin miners tracked by the bank fell by 23% to $28 billion in December, compared to a 52% increase in November. In contrast to Bitcoin’s approximately 120% rise last year, the TeraWulf (WULF) miner outperformed Bitcoin with a 136% increase.
Mining Profitability
Profitability for Bitcoin miners improved as the value increase of the cryptocurrency outpaced the growth in the network’s hashrate. However, they still fall significantly short of pre-halving levels, indicating challenges in covering operational costs.
The concept of hashrate refers to the total combined computing power used for mining and processing transactions in a blockchain network. In proof-of-work systems like Bitcoin, an increase in hashrate enhances network security while also raising mining difficulty.
JPMorgan’s report provides crucial insights into the future profitability of Bitcoin mining and the dynamics of the network. Observing how the mining industry will shape itself based on fluctuations in the cryptocurrency market will be essential.
The sustainability of mining operations is closely related to cryptocurrency prices and technological advancements. Stakeholders in the industry must carefully monitor these dynamics to formulate their strategies.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
