Bitcoin (BTC) mining profitability has plummeted to unprecedented lows, according to a research report by JPMorgan released on Tuesday. The report, authored by analysts Reginald Smith and Charles Pearce, reveals that Bitcoin miners earned an average of $43,600 per exahash per second (EH/s) in daily block rewards throughout August the lowest rate ever recorded.
This figure marks a stark contrast to the peak profitability in November 2021, when miners earned $342,000 per EH/s, with Bitcoin trading at around $60,000 and the network hashrate at 161 EH/s. The dramatic decline in profitability is attributed to a combination of falling Bitcoin prices and a rising network hashrate, which refers to the total computational power used to mine and process transactions on the Bitcoin blockchain.
The declining profitability has taken a toll on mining stocks, which saw a 15% drop in total market capitalization among the 14 U.S.-listed miners tracked by JPMorgan. Only three of these miners outperformed Bitcoin during this period, as the cryptocurrency’s price fell for the third consecutive month.
The report also highlights a 16 EH/s increase in the network hashrate in August, bringing the average to 631 EH/s—just 20 EH/s below pre-halving levels. Mining difficulty, which measures how hard it is to find a new block and is closely tied to the hashrate, rose by 9% last month and is now 4% higher than before the halving event.
Despite the bleak outlook, there was a brief surge in transaction fees in August, at one point reaching 120% of the block reward. This temporary spike in fees offered a slight positive for miners, although it was not enough to offset the broader challenges.
The report also noted that Bitcoin’s annualized volatility increased to 62% in August, up from 45% in July, indicating heightened uncertainty and risk in the market. As Bitcoin mining continues to face mounting difficulties, the industry is grappling with the implications of a more competitive and less profitable environment.
