In the first half of November, the economics of Bitcoin mining showed noticeable improvements, according to an analysis by JPMorgan experts. The main factor was the growth in mining profitability amid the increase in Bitcoin's price, reports CoinDesk, citing a report from the investment bank.
Growth in mining profitability
Analysts Reginald Smith and Charles Pierce noted that the Bitcoin Hashprice Index has risen by 29% since the end of October. This growth is explained by the following factors:
- Rate: The increase in the value of Bitcoin outpaces the growth of the hash rate.
- Transaction fees: Their share in block rewards has increased, adding profitability for miners.
As of November 19, the Hashprice Index stands at $58.79. This means that a miner with equipment capable of 1 PH/s (petahash per second) earns approximately $58.79 per day.
Success of public mining companies
From October 31 to November 15, the total market capitalization of public mining companies tracked by JPMorgan increased by 33% (approximately $8 billion). Experts attribute this growth to both the strengthening of the BTC price and positive market expectations following the U.S. presidential elections on November 5.
An additional boost was provided by Donald Trump's victory. Already on November 13, Bitcoin set a new historical maximum, exceeding $93.4 thousand, adding $19 thousand over the week.
Growth in hash rate and mining difficulty
The increase in the total computational power of the Bitcoin network indicates growing activity among miners. The average network hash rate rose by 2% compared to October, reaching a level of 718 Eh/s (exahashes per second).
At the same time, mining difficulty has also set a new record. As of November 18, it reached 102.29 T, indicating that mining is becoming more labor-intensive due to the increasing number of participants.
The role of American companies
14 mining companies from the USA control about 28% of the world's hash rate, which remains a record-high share. Their computing power continues to hold leading positions in the global market.
The situation in Russia
On November 1, cryptocurrency mining was legalized in Russia. However, starting December 1, authorities plan to restrict mining in certain regions to avoid overloads in the power grid.
Conclusion
The growth in mining profitability, the strengthening positions of American mining companies, and record mining difficulty indicators highlight the strengthening of the cryptocurrency sector. However, against this backdrop of activity, the market will need to adapt to increasing competition, technological challenges, and changes in legislation.
