In June, Bitcoin (BTC) mining experienced a decline in profitability due to a drop in cryptocurrency prices. Despite the network's stable hashrate, Jefferies highlighted this issue in a new report.
Warning and Price Reduction
Considering that the Bitcoin network's hashrate is an indicator of competition in the mining sector, investment bank Jefferies lowered the target price for Marathon Digital Holdings (MARA) shares from $22 to $17, maintaining its “hold” recommendation. Marathon Digital’s shares fell by approximately 0.7% to around $15 in pre-market trading following the report’s release.
Growth of American Miners' Share
The report also noted that U.S.-listed mining companies achieved a larger share of Bitcoin production in July compared to June. These companies increased their share of the Bitcoin network’s total hashrate to 21.1%, up from 20.7% the previous month.
Rapid Growth of Capacity
Jefferies analysts Jonathan Petersen and Joe Dickstein explained the reason for the expanding market share of U.S. miners, stating, “Public mining companies brought new capacities online faster than the network’s hashrate growth.” In this context, Marathon Digital produced a total of 692 BTC in July, a 17% increase from the previous month, making it the largest Bitcoin producer in the sector. It was also emphasized that the company’s installed hashrate capacity is the largest in the industry.
Trends in the mining sector highlight the increasing influence of U.S. companies in the global Bitcoin mining market. However, there are warnings that the coming months could be more challenging for miners.
Comments