Daily Mining Revenue and Gross Profit Fall for Fourth Consecutive Month
According to a recent report by JPMorgan, daily mining revenue and gross profit fell in October for the fourth month in a row. This decline is a significant concern for the industry, as it indicates a decrease in profitability for bitcoin miners.
Mining Difficulty Hits an All-Time High
The bank noted that mining difficulty hit an all-time high in October. Mining difficulty refers to the amount of computational power required to mine a block on the blockchain. When mining difficulty increases, it becomes more challenging for miners to solve the complex mathematical equations needed to validate transactions and earn rewards.
Decline in Daily Block Reward Gross Profit
The report also stated that daily block reward gross profit fell by 2% in October to the lowest level ‘on recent record.’ This decline is particularly concerning, as it suggests that miners are facing significant challenges in maintaining profitability despite the increasing difficulty of mining.
Hashprice Relief from Transaction Fees
On a more positive note, transactions fees spiked to as high as 60% of the block reward toward the end of the month. This increase provided some relief for miners in terms of hashprice, which is a measure of mining company daily revenue. However, it remains to be seen whether this increase will be sustainable in the long term.
Record-Breaking Hasrate
The monthly average hashrate for the Bitcoin network surged to a record high of 702 EH/s (exahash per second) in October. This represents a whopping 9% gain from the month previous and demonstrates the increasing competitiveness of the industry.
Breaking Down the Numbers: A Closer Look at Hasrate
| Metric | September | October |
| — | — | — |
| Monthly average hashrate (EH/s) | 644 EH/s | 702 EH/s (+9%) |
| Month-end seven-day moving average network hashrate (EH/s) | 635 EH/s | 748 EH/s (+18% from Sept, +62% YoY) |
Total Market Cap of Publicly Listed Miners Rises
The total market cap of the 14 publicly listed miners that JPMorgan tracks rose by 14% to $23.9 billion in October. This increase is primarily driven by companies with high-performance computing (HPC) exposure, which has led to a surge in their stock prices.
Why Hasrate Matters
Hasrate is a critical metric for the bitcoin mining industry, as it reflects the total combined computational power used to mine and process transactions on a proof-of-work blockchain. A higher hashrate indicates greater competition among miners, which can lead to increased difficulty in solving mathematical equations and earning rewards.
Long-Term Implications
The decline in daily mining revenue and gross profit for four consecutive months is a cause for concern. If this trend continues, it could have significant implications for the industry’s long-term sustainability. Miners may be forced to adapt their strategies or explore alternative revenue streams to remain profitable.
Conclusion
The recent report by JPMorgan highlights the challenges facing the bitcoin mining industry in terms of profitability and competitiveness. While transaction fees provided some relief for miners, the decline in daily block reward gross profit remains a significant concern. As the industry continues to evolve, it will be essential for miners to adapt and innovate to maintain their position in the market.
References
- JPMorgan Research Report: "Bitcoin Miners Face Decline in Daily Revenue"
- CoinDesk Article: "U.S.-Listed Bitcoin Miners Hit Record 29% of Network Hasrate in October: JPMorgan"
Note: The references provided are for informational purposes only and do not imply endorsement or affiliation with the mentioned sources.
