Analysis of Bitcoin Mining Profitability in June
The recent report from Jefferies, an investment bank, reveals a significant increase in Bitcoin (BTC) mining profitability during June compared to the previous month. This surge in profitability was primarily influenced by a 2% rise in Bitcoin's price and a notable 5% decline in network Hashrate. These adjustments were a direct response to the impact of the recent halving event.
According to Jonathan Petersen, an analyst at Jefferies, June marked a period of gradual recovery following the drastic effects of the halving, particularly evident in May. Network Hashrate, a metric measuring the total computational power utilized for mining and validating transactions on a proof-of-work blockchain, functions as a crucial gauge of competition and mining complexity.
The halving event, occurring every four years, cut miners' rewards by half, consequently moderating the growth rate of Bitcoin's supply. Jefferies also revised the price targets for various mining firms. For instance, the price target for Marathon Digital (MARA) was adjusted downward from $24 to $22.
Similarly, the bank revised its price objectives for Argo Blockchain ADRs (ARBK) to $1.20 from $1.50 and for UK-listed shares (ARB) to 9.5p (12 cents) from 11.90p, maintaining a hold rating on the company. Each ADR corresponds to 10 shares.
The report shed light on a strategic shift witnessed among Bitcoin miners towards integrating high-performance computing (HPC) and artificial intelligence (AI) into their operations. This shift is aimed at diversifying revenue sources and leveraging the increasing demand for AI and cloud computing infrastructure, fueled by diminishing profitability in Bitcoin mining post-halving events.
This analysis does not constitute financial advice.
