A research from JPMorgan states that Bitcoin miners are finding it difficult to maintain profit due to the April halving of the Bitcoin network and increasing power prices.
A Historic Quarter for Miners
According to analysts Reginald Smith and Charles Pearce, Q2 2023 was a historic quarter for Bitcoin miners. They had to deal with the 4th Bitcoin halving event, which cut the daily BTC mining opportunity in half. This resulted in lower margins and profitability. In the halving event that occurred on April 20, the Bitcoin network cut mining payouts in half, from 6.25 BTC every 210,000 blocks to 3.125 BTC.
Shifting to AI Projects
JPMorgan noted that cash-rich miners such as Riot Platforms and Cleanspark have been acquiring other miners with turn-key facilities in order to boost their power pipeline and raise their near-term hashrate. Miners with little cash, such as IREN and Cipher, prioritized acquiring greenfield possibilities because of the lower capital requirements. Meanwhile, some miners are shifting their computational power from Bitcoin mining to AI projects.
Financial Measures and Consequences
In Q2, the five Bitcoin miners that JPMorgan keeps tabs on mined 5,854 Bitcoin, a decrease of 28% compared to the previous quarter. Marathon Digital Holdings earned 2,056 BTC, maintaining its lead in the amount of Bitcoins mined. CleanSpark increased its market share in Q2 thanks to $231 million in capital expenditures. It earned almost 27% of all covered miners’ Q2 revenues, according to the research. According to the research, in order to meet the increasing needs of the sector, the five miners issued around $1.2 billion worth of stock.
Bitcoin miners are facing challenges caused by the April halving and rising power prices, leading to new strategic decisions such as shifting to AI projects and financial measures to maintain profitability.
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