Competition among Bitcoin (BTC) miners is falling, but their profits are falling even faster. Miner profitability fell to its lowest level ever in December, according to a new report from JPMorgan.
Bitcoin network has declining hashrate for the second month in a row
The Bitcoin network’s hashrate, a measure of the total computing power used to process transactions and mine new blocks, fell by three percent in December compared to the previous month. This is evident from a report by investment bank JPMorgan.
According to analysts Reginald Smith and Charles Pearce, the average hashrate in December was 1,045 exahashes per second (EH/s), down 30 EH/s from November.
Although a lower hashrate usually means that competition among miners decreases, this is not noticeable in terms of profit. On the contrary.
Miners’ profitability drops to historic lows
JPMorgan calculates that Bitcoin miners earned an average of only $38,700 per EH/s per day in block rewards in December. That is seven percent less than in November and no less than 32 percent lower than a year ago. This makes it the lowest level since the bank started keeping these statistics.
Gross profit also fell sharply. On average, miners earned $17,100 per EH/s in block rewards after deducting variable costs, a nine percent decline month-over-month.
The analysts do not cite a specific cause, but point out that the Bitcoin price has fallen since October, while energy prices and the impact of the halving put further pressure on margins.
Listed miners are performing remarkably well
Yet the picture is not completely bleak. The combined market value of fourteen American listed mining companies and data centers increased by 73 percent last year to $48 billion.
Within that group, Hut 8 stood out positively with a price increase of two percent in December, while CleanSpark fell 33 percent.
Over the year, nine out of fourteen companies outperformed Bitcoin itself, with IREN and Cipher Mining being notable outliers.
Source: https://newsbit.nl/jpmorgan-waarschuwt-dat-winst-bitcoin-miners-keldert/
