The Bitcoin mining sector experienced robust expansion in March 2024, propelled by surging cryptocurrency prices reaching unprecedented heights, states a report by JPMorgan.
This analysis arrives at a pivotal juncture as the industry braces for the impending Bitcoin halving event slated for April 16, 2024, poised to significantly impact miners’ rewards and overall profitability.
During March, Bitcoin’s price skyrocketed to an average of nearly $67,600, achieving its highest recorded level. The month concluded with a seven-day rolling average price hovering around $69,900, denoting a remarkable 25% surge from the preceding month. Furthermore, annualized volatility surged to 65% in March, a notable increase from February’s 42%.
The network’s average daily hashrate, indicative of the computational power deployed for mining and transaction processing, reached an unprecedented pinnacle of 600 EH/s (exahash per second) in March. This figure represents a 4% uptick from February and an impressive 80% year-over-year growth. Such a surge in hashrate underscores not only intensified competition among miners but also the industry’s resilience and positive outlook, as highlighted in the report.
However, notwithstanding these favorable trends, the imminent Bitcoin halving event, which will halve the block reward from 6.25 to 3.125 bitcoins, casts a shadow of uncertainty over future mining profitability. JPMorgan’s report posits that the halving may precipitate a profitability downturn in April unless mitigated by a robust Bitcoin price rally or a substantial decline in network hashrate.
In March, the average daily block reward revenue per exahash for miners surged to $100,400, the highest since August 2022, signifying a notable 33% sequential increase. This spike in profitability was attributed to Bitcoin’s price appreciation outpacing the growth in network hashrate.
Furthermore, the report delves into the performance of U.S.-listed Bitcoin mining companies, revealing that the aggregate market capitalization of 14 monitored miners surged by 3% month-over-month to $20 billion. This figure accounts for 42% of the four-year revenue opportunity, according to JPMorgan’s estimations.
Among the listed companies, Cipher Mining Inc (NASDAQ:CIFR) emerged as the top performer, witnessing a remarkable 74% surge, while Bitfarms Ltd (NASDAQ:BITF) experienced a 22% decline, marking it as the least favorable stock of the month.
