Bitcoin (BTC) mining stocks have declined due to the increase in network hashrate which in turn has reduced the profitability of mining, according to a recent JPMorgan research report.
Hashrate is defined as the total computational power utilized to mine and process transactions on a proof-of-work blockchain.
The aggregate market capitalization of fourteen U.S.-listed mining companies monitored by the bank dropped by 18% since the end of July, trading at twice their proportional share of the four-year block reward, according to analysts Reginald Smith and Charles Pearce.
However, the report also highlights a silver lining: the share of the U.S.-listed miner’s in the Bitcoin network hashrate has increased for four consecutive months, reaching a new high of 26%.
The network hashrate experienced an increase of approximately five exahashes per second (EH/s), marking a 1% growth, to reach an average of 621 EH/s during the initial two weeks of the month. This was reported by the bank, which also noted that the hashrate is still lower by 30 EH/s compared to pre-halving figures.
Additionally, the hashprice, an indicator of the profitability of mining, remains around 30% less than the values observed in December 2022 and about 40% below those before the halving. This situation may impede the growth of the hashrate in the short term, as mentioned in the report.
According to the bank, since the halving, the price of bitcoin has decreased by approximately 5%. Despite this drop, bitcoin’s price has escalated by 35% since the beginning of the year and by 104% on an annual basis.
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