Bitcoin Mining Profitability Rebounds in June after Halving Impact

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As a seasoned crypto investor with a keen interest in Bitcoin mining, I find the recent report by Jefferies on the current state of Bitcoin mining profitability both intriguing and reassuring. Having closely monitored the industry’s ups and downs for years, I can attest to the challenges miners face in the wake of halving events.

As a crypto investor, I’ve noticed an encouraging shift in Bitcoin (BTC) mining profitability in June following a challenging May, based on a recent report by investment bank Jefferies. This improvement aligns with a 2% increase in Bitcoin’s price and a 5% decrease in network hashrate. The market seems to be adjusting to the impact of the April halving event.

According to analyst Jonathan Petersen in the Jefferies report, June represented a more subdued bounce back from the significant repercussions of the halving, which were particularly noticeable in May.

As a researcher studying Bitcoin, I would explain that hashrate refers to the total computational power being used to mine Bitcoin. This metric reflects the level of competition within the industry and influences mining difficulty. The halving event every four years reduces the rate at which new Bitcoins are generated by half, consequently cutting miners’ rewards in half.

Jefferies Adjusts Bitcoin Miner Targets

As a crypto investor, I’ve been keeping a close eye on the price movements of publicly traded Bitcoin mining companies. Recently, Jefferies announced adjustments to their price targets for some of these stocks. For instance, my “hold” rating on Marathon Digital (MARA) has been revised downward from a target price of $24 to $22. Similarly, the bank reduced its target price for Argo Blockchain’s ADRs (ARBK) from $1.50 to $1.20, and for its UK-listed shares (ARB) from 11.90p to 9.5p, which is approximately equivalent to 12 cents in US dollars.

As an analyst, I’d like to point out that Jefferies kept their recommendation for Argo Blockchain at “hold.” It’s essential to keep in mind that each American Depository Receipt (ADR) represents ten underlying shares.

One potential way of paraphrasing this: The report brings attention to an intriguing development: some Bitcoin miners are transitioning towards utilizing high-performance computing (HPC) and artificial intelligence (AI) facilities. This change in direction is intended to broaden their income sources and seize the expanding market need for AI and cloud computing technology infrastructure.

According to Petersen’s analysis in the report, the decrease in Bitcoin mining profits, notably following the latest halving incidents, has instigated this strategic change.

US Mining Companies Gain Share

As a researcher studying Bitcoin mining, I observed that US-listed mining companies claimed a larger proportion of freshly mined Bitcoins in June compared to May. Specifically, their share grew from 19.1% to 20.8% of the total network output. This expansion can be attributed to the addition of new mining capacity and the decline in the Bitcoin network hashrate.

The report goes on to disclose that Marathon Digital was the leading Bitcoin miner in June with a production of 590 tokens, representing a 4% decrease from the previous month. Conversely, CleanSpark (CLSK) experienced a 7% growth and mined 445 Bitcoins during the same period.

Marathon Corporation maintained its top spot amongst American mining companies in terms of installed hashrate, boasting a capacity of 31.5 exahashes per second (EH/s). Riot Platforms came in a strong second place with a capacity of 22 EH/s.

As a market analyst, I’ve observed that despite concerns over Bitcoin mining profitability following the halving in June, there have been promising signs suggesting the market is readjusting. Some miners are making strategic moves towards hosting High Performance Computing (HPC) and Artificial Intelligence (AI) applications. By diversifying their revenue streams in this way, they aim to adapt to the evolving landscape and maintain profitability.

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2024-07-08 14:27