Bitcoin (BTC) miners experienced a significant boost in daily revenue and gross profits in December, marking the second consecutive month of growth. According to a report by JPMorgan, this increase is the highest seen since April, driven by Bitcoin’s price rally surpassing the growth in network hashrate.
Revenue and Profit Increase
JPMorgan estimates that Bitcoin miners earned an average daily block reward revenue of $57,100 per exahash (EH/s) in December, a 10% increase compared to November. However, analysts Reginald Smith and Charles Pearce noted that daily revenue and gross profit per EH/s remain 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. While hashrate growth for 2024 was 54%, it fell short of the 103% growth observed in 2023. Mining difficulty rose by 7% from the previous month, now standing 27% higher than pre-halving levels in April.
Market Performance
The combined market value of 14 publicly traded Bitcoin miners tracked by JPMorgan dropped by 23% in December to $28 billion. This decline follows a 52% increase in November. Notably, TeraWulf (WULF) outperformed Bitcoin, achieving a 136% gain, compared to Bitcoin’s 120% annual rise.
Mining Profitability
Bitcoin’s value growth outpacing hashrate expansion has led to improved mining profitability. However, miners still face challenges as profitability remains significantly below pre-halving levels, reflecting the high operational costs involved.
Understanding Hashrate Dynamics
Hashrate, the total computational power used for mining and processing transactions in a blockchain network, plays a crucial role in network security and mining difficulty. As hashrate increases, so does mining difficulty, impacting profitability.
JPMorgan’s report highlights key insights into the future profitability of Bitcoin mining and network dynamics. As the industry evolves, its sustainability will depend on Bitcoin’s price trends, technological advancements, and shifting market conditions.
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