Bitcoin (BTC) mining stocks suffered in the first half of September as the cryptocurrency’s price remained below $60,000, while the network’s hashrate surged, according to a JPMorgan research report released on Monday.
The report highlights that Bitcoin’s hashrate a measure of the total computational power used to mine and validate transactions rose by 4% this month, returning to pre-halving levels. The increase in hashrate signals growing competition in the mining industry. However, this rising hashrate is pressuring profitability, with the hashprice, or miners’ daily earnings, falling by 2% month-to-date and now sitting at 50% below pre-halving levels.
JPMorgan analysts Reginald Smith and Charles Pearce noted that the declining hashprice, combined with seasonal curtailment (power reductions during peak demand), could lead to a slowdown in hashrate growth in the near term.
Despite the overall struggles, U.S.-listed bitcoin miners’ share of the global network hashrate reached a record high of 26.7%, marking the fifth consecutive month of growth. However, the total market capitalization of the 14 U.S.-listed miners tracked by JPMorgan fell by 3% in September, dropping to just under $20 billion.
Among the U.S. mining companies, Hut 8 (HUT) outperformed with an 11% gain, while CleanSpark (CLSK) saw a 12% decline, making it the worst performer in the group.
JPMorgan also noted that the miners are trading at just under two times their proportional share of the four-year block reward opportunity, above the average of 1.6 times since January 2022.
Separately, Jefferies, another Wall Street bank, warned that bitcoin miners could face continued challenges in September, with the potential for further declines in profitability.
