Bitcoin mining economics saw a significant boost in the first half of November, according to a JPMorgan research report released on Monday. Analysts Reginald Smith and Charles Pearce attributed this improvement to a rising hashprice, a key metric for mining profitability.
The hashprice, which measures the revenue miners earn per unit of hashing power, jumped 29% since the end of October. This surge was driven by a combination of factors, including Bitcoin’s price rally outpacing network hashrate growth and an increase in transaction fees as a proportion of the block reward.
The report also highlighted a significant increase in the total market capitalization of publicly traded Bitcoin mining companies. The market cap of the mining stocks tracked by JPMorgan surged by 33%, or approximately $8 billion, between October 31st and November 15th. This growth was attributed to Bitcoin’s price gains and a broader sense of optimism in the cryptocurrency market following the U.S. presidential election.
Bitcoin’s price saw a remarkable rally, surging as much as 30% to all-time highs after Donald Trump’s victory earlier in November. This price surge contributed significantly to the improved profitability of Bitcoin mining.
While the Bitcoin price rallied, the network hashrate, a measure of the total computational power dedicated to mining, saw a more modest increase. The report noted a 2% month-to-date rise in the network hashrate, reaching an average of 718 exahashes per second (EH/s). Hashrate is a key indicator of the competition among miners and the difficulty of mining Bitcoin.
JPMorgan’s coverage of 14 U.S.-listed mining companies reveals that these firms now account for roughly 28% of the global network hashrate, maintaining their record-high share.
