According to Cointelegraph, Bitcoin miners are grappling with profitability issues following the Bitcoin network’s April halving and increasing power costs. A recent JPMorgan report highlights the impact of the halving event, which reduced mining rewards from 6.25 BTC to 3.125 BTC per 210,000 blocks, leading to lower margins and profitability for miners.
The second quarter of 2023 was particularly challenging as miners navigated the fourth Bitcoin halving event. Analysts Reginald Smith and Charles Pearce noted that the halving cut the number of daily coins mined in half, significantly reducing daily revenue opportunities. This has resulted in lower margins and profitability across the industry.
Cash-rich miners like Riot Platforms and CleanSpark have responded by acquiring other miners with turn-key facilities to boost their near-term hashrate and power pipeline. In contrast, capital-constrained miners such as IREN and Cipher have focused on securing greenfield opportunities that require less immediate capital.
JPMorgan's report covers five publicly-traded Bitcoin miners, who collectively mined 5,854 BTC in Q2, a 28% decrease from the previous quarter. Marathon Digital Holdings led the pack, mining 2,056 BTC. CleanSpark gained market share by investing $231 million in capital expenditure during Q2, earning around 27% of total Q2 revenues among the covered miners.
To keep up with the industry's rising demands, the five miners issued approximately $1.2 billion in equity. Post-halving, some miners are reallocating computational power from BTC mining to artificial intelligence applications. For instance, Hive Digital Technologies Ltd. saw a 36% increase in sales in Q2 2024 after diversifying into AI services. Meanwhile, Bitdeer Technologies Group is doubling down on BTC mining with advanced equipment.
