JPMorgan Reports a 29% Increase in Bitcoin Mining Profitability

In the first half of November, the hash price—a key metric for Bitcoin mining profitability—rose by 29%, according to a report from CoinDesk, citing JPMorgan’s analysis.

Factors Driving Mining Profitability

Analysts Reginald Smith and Charles Pierce attribute the significant improvement in mining economics to two key factors:

1. Bitcoin Price Surge: The cryptocurrency rally outpaced the increase in hash rate.
2. Increased Share of Transaction Fees: A higher percentage of miner rewards now comes from transaction fees.

Following Donald Trump’s victory in the U.S. presidential election in early November, Bitcoin’s price surged by 30%, reaching a new all-time high.

Hash Rate and Mining Difficulty

During the same period, the network’s total computational power increased by 2%, averaging 718 EH/s. On November 18, after a difficulty adjustment, mining difficulty rose by 0.63%, setting a record at 102.29 T. This reflects a slowdown in hash rate growth but continues to pressure mining profitability.

Market Performance of Mining Companies

JPMorgan noted that 14 U.S.-listed mining companies tracked by the bank still account for approximately 28% of the network’s total hash rate. The combined market capitalization of these companies increased by 33%, or roughly $8 billion, between October 31 and November 15.

Outlook for Miners

In October, analysts at Matrixport highlighted the potential for miner stock prices to rise as mining revenues stabilize and lag behind Bitcoin’s upward momentum.

Bitcoin’s strong price performance and adjustments in mining dynamics suggest a favorable outlook for the mining sector in the near term.