Bitcoin Miners See Profitability Jump in December, Though Still Below Pre-Halving Levels: JPMorgan

Bitcoin miners experienced a welcome boost in profitability in December 2024, marking the second consecutive month of gains, according to a recent research report from JPMorgan. This positive trend, fueled by Bitcoin's price rally outpacing the growth in mining difficulty, offers a glimmer of hope for the industry after a challenging year.

Bitcoin mining profits rose in December. Despite a 10% gain, revenue remains below pre-halving levels.

JPMorgan's analysis reveals that Bitcoin miners earned an average of $57,100 per exahash per second (EH/s) in daily block reward revenue last month. That's a 10% increase from November and the highest level since April. However, it's important to note that these figures are still significantly lower than before the Bitcoin halving event in April, which reduced the block reward for miners. Daily revenue and gross profit are still down 43% and 52% respectively, compared to pre-halving levels.

Key Factors at Play:

• Bitcoin's Price Performance: The recent surge in Bitcoin's price has been a major contributor to the increased profitability.
• Hashrate Growth Slows: The network's hashrate, which represents the total computational power dedicated to mining, grew by 6% in December to an average of 779 EH/s. While still growing, this is a slower pace than the 103% increase seen in 2023.
• Mining Difficulty on the Rise: Mining difficulty, which adjusts to maintain a consistent block creation rate, increased by 7% in December and is now 27% higher than before the halving. This reflects the ongoing competition within the mining sector.

Public Miners' Market Performance

Despite the improved profitability, the total market capitalization of the 14 publicly listed Bitcoin miners tracked by JPMorgan declined by 23% in December, following a 52% surge in November. This highlights the volatility that can still be seen in the mining sector despite overall positive trends.

What's Next for Bitcoin Miners?

While the recent uptick in profitability is encouraging, the Bitcoin mining landscape remains complex and dynamic. Factors such as energy costs, regulatory developments, and future Bitcoin price movements will all play a crucial role in determining the long-term sustainability of mining operations. The slower growth in hashrate may signal that we have reached a temporary peak in new operations coming online.

The Bottom Line

December's rise in Bitcoin mining profitability provides a positive sign for miners, but it's essential to view this within the broader context of the industry's challenges and ongoing evolution. As we move further into 2025, the interplay between Bitcoin's price, hashrate growth, and mining difficulty will continue to shape the fortunes of those powering the world's most famous blockchain.