Bitcoin Mining Revenue and Profit Declined for Fourth Consecutive Month

Daily Bitcoin mining revenue and gross profit decreased in October for the fourth month in a row

The data comes from a research report by JPMorgan released on Friday. The bank noted that daily block reward gross profit fell by 2% in October to the lowest level “on recent record.” Mining difficulty also hit an all-time high during the month, the report said.

The reason? The Bitcoin hashrate is high, but the price is still not able to break out of the range it has been in since March.

 

Source: Brave New Coin BLX, Bitcoin in a massive range since March

Source: Blockchain

JPMorgan estimated that Bitcoin miners earned an average of $41,800 per exahash per second (EH/s) of hashrate in daily block reward revenue, which is 1% less than in September. Hashrate refers to the total combined computational power used to mine and process transactions on a proof-of-work blockchain and serves as a proxy for competition and mining difficulty in the industry.

On a positive note, transaction fees spiked to as high as 60% of the block reward toward the end of the month, providing some hashprice relief, the bank said. The hashprice is a measure of a mining company’s daily revenue.

The monthly average hashrate for the Bitcoin network surged to a record high of 702 EH/s in October, marking a significant 9% increase from the previous month, the report noted. Analysts Reginald Smith and Charles Pearce wrote, “The month-end seven-day moving average network hashrate stood higher at 748 EH/s, up 18% from the end of September and up 62% year-on-year.”

Additionally, the total market capitalization of the 14 publicly listed miners tracked by the bank rose by 14% to $23.9 billion, led by companies with high-performance computing (HPC) exposure.

Russia to Ban Mining?

Reports suggest Russia is suffering from severe energy deficits, and will ban crypto mining to stabilize the power grid in affected areas. Regions facing the ban include the Far East, southwestern Siberia, and the South, where authorities anticipate insufficient power capacity until at least 2030.

The ban follows recently enacted legislation that grants the government authority to restrict cryptocurrency mining in specific locations. This law, which takes effect on November 1st, also prohibits advertising related to cryptocurrency and services utilizing it. Major Russian companies like Yandex, the country’s largest search engine, have already begun implementing these advertising restrictions.

Pivot to AI

Six months after Bitcoin’s April 2024 halving, mining firms are facing shrinking revenue streams, compelling them to rethink their strategies in a rapidly evolving landscape.

The halving—a scheduled event that halves the reward miners receive for verifying transactions—is designed to control inflation by reducing Bitcoin’s supply. This time, however, it has brought unprecedented pressure on miners by significantly cutting their profits per block mined. Publicly traded miners like MARA Holdings, Riot Platforms, and CleanSpark are responding in various ways. While some are adopting the “HODL” strategy—holding onto their Bitcoin in anticipation of future price increases—others are pivoting toward artificial intelligence (AI) to diversify their revenue streams.