Since the beginning of the year, Bitcoin’s price has surged by 113%, yet the shares of most mining companies have ended up “in the red” during this period, as noted by Cointelegraph.
Out of 25 public miners, only seven have yielded profitable stock returns in 2024:
- Core Scientific (CORZQ) — shares increased by 327%;
- TeraWulf (WULF) — 169%;
- Bitdeer (BTDR) — 167%;
- Hut 8 (HUT) — 91%;
- Iris Energy (IREN) — 72%;
- Northern Data (NB2) — 58%;
- Cipher (CIFR) — 33%.
The leading decliners among the largest players by market capitalization were:
- Argo Blockchain (ARB) — shares fell by 84%;
- Greenidge (GREE) — 74%;
- Sphere 3D (ANY) — 69%;
- Bitfarms (BITF) — 44%;
- Hive (HIVE) — 29%;
- MARA Holdings (MARA) — 12%;
- BitFufu (FUFU) — 18%.
Since April, Bitcoin miners have faced declining revenue due to the scheduled halving. The block reward was reduced from 6.25 BTC to 3.125 BTC.
Even as the leading cryptocurrency reached record highs above $100,000 in December, daily miner revenue overall failed to exceed $50 million. In March and April, the figure ranged from $60-70 million.
Additional pressure on cryptocurrency mining profitability came from the increase in mining difficulty. On December 16, the metric reached a new high of 108.52 T. Over the past 12 months, the figure has risen by more than 50%.
Some miners reported a significant increase in operating expenses over the past year. For instance, BitFuFu’s costs rose by 168% in the second quarter, reaching $51,887 per mined Bitcoin.
A trend for mining companies this year has been diversifying income through expansion into AI computing. One of the largest deals in this area was struck by Core. The partnership with CoreWeave is expected to generate $8.7 billion in revenue over 12 years.
Other public miners, such as TeraWulf, Hut 8, and IREN, have also pursued AI computing business development.
Analysts at JPMorgan noted that to finance operational costs and add shareholder value, companies in the industry have increasingly been acquiring Bitcoin on their balance sheets, following the example of MicroStrategy.
Leaders in this trend include MARA, Hut 8, and Riot Platforms.