Bitcoin Mining Profitability Declines in September Amid Rising Hashrate, Jefferies Reports

Bitcoin mining profitability dropped in September as the network hashrate increased by 1.7%. October may prove more challenging for miners due to an 11% rise in hashrate.

In a recent report by Jefferies, it was revealed that Bitcoin (BTC) mining profitability experienced a decline in September compared to the previous month. The report highlights that the average price of Bitcoin remained largely unchanged, while the network hashrate saw an increase of approximately 1.7%. As a result, the average daily revenue per exahash decreased by 2.6% during the same period.

Challenges Ahead for Miners

Looking ahead, analysts Jonathan Petersen and Joe Dickstein warned that October could pose even greater challenges for Bitcoin miners. Although BTC prices rose by around 5%, this increase is overshadowed by an 11% rise in the network hashrate, which significantly affects profitability. The rising hashrate means that more computing power is competing to mine Bitcoin, making it harder for individual miners to earn rewards.

North American Mining Companies Gain Market Share

Interestingly, North American-listed mining companies managed to increase their share of Bitcoin mined in September, comprising 22.2% of the total network, up from 19.9% in August. This increase can be attributed to better uptime for these firms, which benefitted from lower temperatures during the month.

Marathon Digital (MARA) emerged as the largest miner, producing 705 Bitcoin, followed closely by CleanSpark (CLSK), which mined 493 tokens. Marathon Digital also maintained the highest installed hashrate in the sector, reaching 36.9 exahashes per second (EH/s) by the end of September. Riot Platforms (RIOT) followed as the second-largest miner with a hashrate of 28.2 EH/s.

Future Policies and Market Dynamics

Jefferies further noted that the so-called “Bitcoin election” is nearing its conclusion, suggesting that regardless of the outcome, there could be increasingly favorable policies emerging for the cryptocurrency mining industry. This potential shift in regulatory frameworks may provide a more supportive environment for miners moving forward, potentially offsetting some of the current profitability challenges.

Conclusion

In summary, Bitcoin mining profitability fell in September due to an increase in the network hashrate, which overshadowed the modest rise in Bitcoin prices. With North American mining companies gaining a larger share of the market and the upcoming potential for favorable policies, the landscape for Bitcoin mining remains dynamic. However, October may present additional challenges for miners as they navigate the balance between rising costs and competitive rewards.

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