JPMorgan Reports 29% Increase in Bitcoin Mining Profitability

In the first half of November, the profitability of bitcoin mining—hashprice—rose by 29%. This was reported by CoinDesk, citing a JPMorgan report.

Analysts Reginald Smith and Charles Pierce noted that two main factors contributed to the significant improvement in mining economics:

• the rally in the leading cryptocurrency’s prices, which outpaced the increase in hash rate;
• the rise in the share of transaction fees as a percentage of block rewards.

Following Donald Trump’s victory in the U.S. presidential election in early November, the price of bitcoin increased by about 30%, reaching a new all-time high.

The total computational power of the network during this period grew by 2%, reaching an average of 718 EH/s.

On November 18, a recent mining difficulty adjustment resulted in an increase of only 0.63%, confirming a slowdown in hash rate expansion. However, the record-high level of 102.29 T will continue to pressure mining profitability.   

According to JPMorgan, the 14 U.S.-listed mining companies tracked by the bank still account for about 28% of the network’s total power.

The total market capitalization of these enterprises rose by 33%, or approximately $8 billion, from October 31 to November 15.

Back in October, analysts at Matrixport highlighted the potential for miner valuations to rise due to the stabilization of revenue declines and lagging behind bitcoin’s dynamics.