Bitcoin Miners Experience Significant Market Decline
The total market capitalization of the 14 U.S.-listed bitcoin (BTC) mining companies monitored by JPMorgan Chase (JPM) witnessed a staggering decline of 25% in March. This marks the third-worst monthly performance recorded for these miners, as highlighted in a recent report released by the Wall Street bank on Tuesday.
Among these companies, only Stronghold Digital Mining (SDIG) managed to outperform bitcoin (BTC) during the past month. The report also pointed out that miners with a strong focus on high-performance computing (HPC) have notably underperformed compared to pure-play miners for the second consecutive month.
According to analysts Reginald Smith and Charles Pearce, “We note that the current valuations are at their lowest levels in relation to the block reward since the significant collapse of FTX in the fall of 2023.” This highlights the challenging environment that bitcoin miners are currently navigating.
The average network hashrate saw a slight increase in March, reaching 816 exahashes per second (EH/s). This hashrate is a crucial metric that indicates the total combined computational power utilized for mining and processing transactions on a proof-of-work blockchain. It serves as an important proxy for assessing competition within the mining industry as well as the difficulty level of mining.
Unfortunately, both mining revenue and profitability took a hit during this period. The bank estimated that bitcoin miners generated an average daily block reward revenue of $47,300 per EH/s in March, reflecting a 13% decrease from February’s figures. Furthermore, daily block reward gross profit fell by 22% month-on-month, settling at $23,000 per EH/s.
In a notable contrast, Stronghold Digital Mining managed to limit its decline to just 2% last month, outperforming the overall sector. On the other hand, Cipher Mining (CIFR) faced a significant downturn, experiencing a 45% slump in its stock value.
