Market Cap Decline and Price Pressures
In February, the total market capitalization of the 14 publicly traded Bitcoin mining companies tracked by JPMorgan experienced a significant drop of 22%. This decline was primarily attributed to a decrease in Bitcoin (BTC) prices and mounting pressures on mining economics.
Impact of High-Performance Computing and AI Announcements
The report highlighted how Bitcoin miners with exposure to high-performance computing (HPC) were adversely affected following the announcement of DeepSeek’s artificial intelligence initiatives. Concerns about the demand for data center capacity in the immediate future further contributed to the downward trend in miner performance.
Revenue and Profitability Declines
Revenue and profitability for Bitcoin miners saw a downturn last month. According to JPMorgan’s estimates, the average daily block reward revenue for miners was approximately $54,300 per exahash per second (EH/s) in February, marking a 5% decrease from January. Analysts Reginald Smith and Charles Pearce noted that gross profit from daily block rewards fell by 9% month-over-month, bringing it down to $29,500 per EH/s.
Increasing Network Hashrate and Mining Difficulty
The average network hashrate saw an increase of 3%, reaching 810 exahashes per second (EH/s) last month. The hashrate represents the collective computational power utilized for mining and processing transactions within a proof-of-work blockchain. Furthermore, mining difficulty also rose by 2% compared to January, with the current difficulty level now standing 28% higher than prior to the halving event that occurred in April of last year.
Performance of Major Mining Companies
Among the publicly listed miners, Core Scientific (CORZ) emerged as the least affected, with a relatively small decrease of 9%. Conversely, Greenidge Generation faced the most significant decline, with a staggering 36% drop over the course of the month.
Conclusion
The challenges faced by Bitcoin miners in February reflect a broader trend of economic pressure within the cryptocurrency mining sector. As market dynamics evolve, miners will need to adapt to these changing conditions to maintain profitability and sustainability in their operations.
