JPMorgan
Report from JPMorgan bank shows that miners' profits fell for the 4th month in a row in October. The reason for this is the growing competition in the sector, which can be seen by the network's hash rate that continues to grow.
So while the price of Bitcoin is up 15.5% this month, it's becoming increasingly difficult to earn the base reward of 3.125 bitcoins per block.
Added to this, the low transaction fees, currently between 2 to 12 sat/vByte, are another point to be considered. Right after the halving, Runes seemed to be a salvation for this industry, but this trend quickly ended.
Bitcoin Miners Under Pressure
Data published by F2Pool shows that only 13 ASIC models are currently generating profits for miners. This is based on an energy cost of $0.07 per kWh and a Bitcoin price of $69,800.
Cost of mining 1 Bitcoin for each ASIC model. Source: F2Pool.
However, a report from CoinShares reveals that electricity is just one of the costs and few companies are comfortable with it. In addition to administrative expenses, equipment depreciation is one of the biggest enemies of these miners.
JPMorgan points out that miners' profits fell for the fourth consecutive month in October, reaching their lowest point. The statements by JPMorgan analysts were shared by CoinDesk.
“The seven-day moving average of the network hash rate at the end of the month was higher at 748 EH/s, an increase of 18% from the end of September and 62% compared to the same period last year,” said JPMorgan analysts Reginald Smith and Charles Pearce.
Data from YCharts shows that Bitcoin's hash rate reached 803 exahashes per second on Wednesday (30), the highest number in the cryptocurrency's history.
Bitcoin hash rate continues to rise and breaks new record. Source: YCharts.
JPMorgan predicts Bitcoin and gold will rise if Trump wins election
As the hash rate only rises and network fees continue to stagnate, what could save miners is the price of Bitcoin itself. The US presidential elections could have an impact on this, according to another JPMorgan report.
“Overall, as long as a Trump victory inspires retail investors to not only buy risky assets but also further adopt the [dollar] 'devaluation strategy,' there could be additional upside potential for dollar prices. bitcoin dollar and gold in a Trump victory scenario.”
The above statements were shared by The Block. In addition to Bitcoin, analysts also highlighted that AI cryptocurrencies and memecoins are on the rise at this pre-election time.