Bitcoin Mining Dominance Grows as Marathon Digital Leads Hash Rate Surge

• Publicly listed Bitcoin mining companies are increasingly dominating Bitcoin’s network security, gaining a larger share of the network hash rate over recent months.
• Despite their significant progress in network dominance, the stock performance of these companies has seen a decline this year.
• According to JP Morgan’s “September ’24 Bitcoin Mining Halftime Report,” U.S. mining firms have expanded their hash rate share to a record 26.7%.

This article delves into the latest trends in Bitcoin mining, highlighting the growing dominance of publicly listed miners, their increased hash rate, and the economic challenges they face.

Record-Breaking Hash Rate Among U.S. Bitcoin Miners

Publicly listed Bitcoin mining companies in the United States have experienced a remarkable increase in their hash rate, achieving significant milestones in network security. According to JP Morgan’s recent report, these companies have collectively expanded their hash rate to an unprecedented 26.7% of the entire Bitcoin network. The hash rate is a critical metric representing the speed at which miners solve Bitcoin transactions, playing a fundamental role in securing the Bitcoin network.

Canadian Miners Outperform U.S. Counterparts

In August, Canadian miner IREN led the charge by adding an impressive 5.5 exahashes per second (EH/s) to their mining fleet, followed closely by Marathon Digital, which increased its capacity by 3.7 EH/s. This substantial increase contributed to an aggregate hash rate of 175 EH/s among publicly listed miners, marking a 50% rise since the start of the year. However, this expansion has not necessarily translated into increased revenues for these companies.

Impact of Bitcoin Halving on Mining Profitability

The Bitcoin halving event in April significantly impacted the mining industry by reducing the block reward size from 6.25 BTC to 3.125 BTC. This reduction has led to a noticeable decline in the number of bitcoins mined per exahash of operating capacity, exacerbated by the rising hash rate and mining difficulty. JP Morgan analysts noted that this metric has progressively decreased over time, particularly during the summer months when miners often curtail operations.

Challenges Facing Public Bitcoin Miners

Despite achieving new all-time highs in hash rate since September, the profitability of Bitcoin miners has been under pressure due to declining Bitcoin prices. The financial health of these companies has also suffered, with most public miners experiencing a drop in stock value. CleanSpark, for example, saw a 12% decline in its stock price, while the Valkyrie Bitcoin Miners ETF (WGMI) has decreased by 2% year-to-date.

Conclusion

The latest data from JP Morgan underscores the dichotomy between the impressive growth in hash rate among publicly listed Bitcoin miners and the financial struggles they face in a volatile market. While these companies continue to secure a larger share of the Bitcoin network, their revenue and stock performance have not kept pace, highlighting the complexities and challenges within the Bitcoin mining sector.