Bitcoin Network Hashrate Declined in June as Miners Reacted to Recent Heatwave: JPMorgan

JPMorgan’s recent research reveals a 3% decrease in Bitcoin’s average monthly hashrate during June. This metric, representing the total computational power securing the Bitcoin network, serves as an indicator of mining competition and difficulty. The decline, according to analysts Reginald Smith and Charles Pearce, is attributed to seasonal weather-related constraints impacting U.S.-based mining operations. They highlight the significant presence of Cipher, IREN, and Riot in Texas, collectively operating over 80 EH/s.

Despite the hashrate dip, Bitcoin mining profitability continues its upward trend. Miners reportedly earned an average of $55,300 per EH/s in daily block reward revenue in June, a 7% increase compared to April. This represents a 13% month-over-month surge in daily block reward gross profit, reaching its highest point since January. This positive trend is reflected in the collective market capitalization of the 13 U.S.-listed Bitcoin miners tracked by JPMorgan, which experienced a 23% increase, or approximately $5.3 billion, from the previous month.

Interestingly, the report highlights a performance divergence among these miners. Companies with high-performance computing (HPC) exposure significantly outperformed pure-play miners, fueled by speculation surrounding a potential deal between Core Scientific (CORZ) and CoreWeave (CRWV). IREN emerged as the top performer within this group, showcasing a remarkable 67% gain. Conversely, Bitfarms (BITF) underperformed, experiencing a 19% decline.

The report underscores the evolving dynamics within the Bitcoin mining landscape, illustrating the impact of external factors such as weather patterns and the strategic diversification of mining operations. The continued improvement in profitability, despite the hashrate decrease, suggests a resilient and potentially expanding mining sector. The performance discrepancies among individual miners highlight the importance of strategic positioning and adaptability in this competitive environment. JPMorgan’s analysis provides valuable insights into the current state and future outlook of the U.S. Bitcoin mining industry.