Bitcoin
Post-Halving Pressure Mounts on Bitcoin Mining Economy: Report By Investing.com
Investing.com – The network’s average monthly hashrate fell sequentially for the first time since December 2022 as the mining economy continues to be pressured by inefficient and older ASICs post-halving, according to a report from JPMorgan.
Daily mining revenue is more than 50% below pre-halving levels, which is expected to moderate hashrate growth in the near term.
Despite these challenges, May was a positive month for US-listed mining sector shares. The JPMorgan report highlights that companies reported record Q1 2024 revenues and adjusted EBITDA, even excluding mark-to-market gains on HODL balances, and increased their share of the network’s hashrate. The aggregate market capitalization of the 14 U.S.-listed miners tracked by JPMorgan rose 19% sequentially to $18.4 billion, led by a nearly 80% rally in shares of Iris Energy.
Bitcoin’s average price in May was approximately $65,200, down less than 1% from April, with the seven-day moving average coming out of the month at around $68,400, an 8% increase from April. to the April value. According to JPMorgan calculations, Bitcoin’s annualized volatility was 51% in May, consistent with the previous month’s 54%.
The network’s hashrate, an indicator of competition in the industry, declined sequentially for the first time since December 2022 as inefficient and older operators exited the network following the halving. The network’s average hashrate was 599 EH/s in May, down 26 EH/s (4%) from April and 50 EH/s from pre-halving levels. The network’s seven-day moving average hashrate at the end of the month stood at 595 EH/s, a 5% drop from the end of April, albeit a 58% year-over-year increase. Mining difficulty has also decreased by 4% compared to the end of April.
Bitcoin mining profitability hovered at record levels in May. Bitcoin miners earned an average of $49,000 per EH/s in daily block reward revenue, the lowest level on record. For context, this metric peaked at $342,000 in November 2021, when Bitcoin’s price was $60,000 and the network’s hashrate was 161 EH/s. It was around $100,000 before the halving. Transaction fees fluctuated between 3% and 10% of the block reward in May, reaching values above 100%, rising modestly from 2% to 3% in April.
The proven block reward (remaining) and four-year block reward revenue opportunity were $87.9 billion and $43.8 billion, respectively, as of May 31, both a 9% increase on compared to April 30th. 21% and 42% of the face value of the proven opportunity and four-year block reward, respectively, a modest sequential increase and above historical averages of 16% and 33%, respectively.
The group of 14 U.S.-listed Bitcoin miners tracked by JPMorgan had an aggregate market value of $18.4 billion as of May 31, up 19% for the month. The best and worst performing stocks for the month were Iris Energy Ltd (NASDAQ:), up 79% and Stronghold Digital Mining Inc (NASDAQ:), down 11%, respectively.