The first quarter of 2025 has been a remarkable period for US-based public Bitcoin mining companies. A recent report from JPMorgan highlights a significant recovery in revenue and profitability within the sector.
Increase in Revenues and Profitability
According to the JPMorgan report, four out of five monitored Bitcoin mining companies reported record levels of revenue and profit. This trend was driven by high Bitcoin prices and increased interest from institutional investors. The report indicated that US mining companies together achieved a gross profit of $2 billion, with average gross margins rising to 53%. In the previous quarter, the sector's gross profit was $1.7 billion, with an average margin of 50%.
Company-Specific Performances
Notably, IREN emerged with the highest gross profit among the monitored firms for the first time. The total cash cost per Bitcoin production dropped to approximately $36,400, leading to a significant uptick in the firm’s profitability.
> "IREN shone with the gross profit attained in the first quarter, significantly enhancing its margins through lower production costs." CITE_W_A
On the other hand, CleanSpark did not increase equity throughout the quarter. JPMorgan noted that the five mining companies it monitored raised only a total of $310 million in capital during the first quarter, a significant decrease from the $1.3 billion in the previous quarter.
Growth and Sustainability
Mining companies also increased their operating expenses. A total of energy costs recorded was $1.8 billion, reflecting an increase of $50 million compared to the prior quarter, highlighting the energy-intensive nature of the industry.
JPMorgan continues to provide a positive outlook for some companies within the sector. The bank maintained its positive rating for CleanSpark, IREN, and Riot Platforms while giving a neutral rating for Cipher Mining and MARA.
> "JPMorgan reports that some mining companies maintain their profitability and growth potential, emphasizing the importance of disciplined growth in the industry." CITE_W_A
The first quarter of 2025 marked a period of record revenues and profits in Bitcoin mining. Companies that were able to control production costs and scale their operations stood out positively in the sector. Energy costs remain a significant expense category in the industry, and a focus on cost management and efficiency is crucial for sustainable growth and future profitability.
