Bitcoin Mining Profitability Bounces Back in June: Jefferies Report

Bitcoin Mining Profitability Bounces Back in June: Jefferies Report

Bitcoin Miners See Reprieve in June

According to a recent research report by investment bank Jefferies, Bitcoin miners experienced a modest recovery in June. The price of Bitcoin increased by 2%, while the total Bitcoin hashrate decreased by 5%, offering some relief to miners. This follows a particularly tough May when mining profitability reached an all-time low due to Bitcoin price pressures and intense industry competition.

Bitcoin Mining Profitability: A Closer Look

“June marked a period of modest recovery from the halving’s immediate impacts, most evident in May,” wrote analyst Jonathan Petersen. As of July 6, Bitcoin’s total hashrate stood at 573 exahashes per second (EH/s), where one exahash equals one quintillion hashes, according to Blockchain.com. The hashrate serves as a proxy for competition in mining; a higher total hashrate translates to lower profitability for individual miners.

Several factors influence mining profitability, including the amount of Bitcoin earned by miners and the market price of BTC. These factors interplay significantly, impacting the profitability of mining operations.

On April 19, Bitcoin experienced its fourth halving event, reducing the BTC reward per block from 6.25 BTC to 3.125 BTC. Combined with a price decline, this event drove Bitcoin’s “hashprice”—a key indicator of mining profitability—to an all-time low on May 1. However, this decrease in profitability forced many inefficient miners offline, allowing more efficient miners to increase their market share.

Performance of Public Miners

The Jefferies report noted that U.S.-listed public miners increased their Bitcoin mining output in June, capturing 20.8% of the network share compared to 19.1% in May. Marathon Digital (MARA), the largest miner, extracted 590 BTC in June, representing a 4% decrease from May. Despite reducing Marathon’s price target from $24 to $22, the bank maintained its hold rating for the firm. Conversely, CleanSpark (CLSK) extracted 445 BTC, marking a 7% increase from the previous month.

The report also highlighted a trend among Bitcoin mining companies to diversify their revenue streams by venturing into high-performance computing. This strategic shift aims to capitalize on the increasing demand for artificial intelligence and cloud computing infrastructure. “Declining Bitcoin mining profitability, exacerbated by recent halving events, has fueled this strategic shift,” explained Petersen.

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