Bitcoin Mining Bounces Back in June as Market Adjusts to Halving, Investment Bank – Jefferies Reports

After a difficult May that saw profitability plummet in the wake of the Bitcoin halving, June offered a sigh of relief for Bitcoin miners. A confluence of factors — now perceivably temporary — including a rising Bitcoin price and a dip in the hash rate led to a modest recovery in profitability, Jefferies notes.

The Halving Effect 

The April 2024 halving, which cut the block reward for miners in half, sent chills through the Bitcoin mining industry. With mining costs remaining relatively constant, many miners were squeezed, with some even being forced to either shut down their operations or reduce their hash rate or price targets.

For instance, Stronghold Digital Mining reported a decrease in revenue of 24% compared to May 2024. This was primarily due to a lower average daily hash rate, which was the result of three temporary factors, namely, a voluntary curtailment due to the record June heat in Pennsylvania between June 17th through June 23rd, a planned outage at the Panther Creek plant that included some maintenance on electrical infrastructure to support the Bitcoin mining operations, and a storm that affected the Panther Creek plant transmission line on June 27th, causing the data center to be down for four days to end the month.

Also, in light of the continued effects of the Bitcoin halving, Jefferies has revised downwards its price expectations for both Marathon Digital (NASDAQ: MARA) from $24 to $23 and to $1.20 from $1.50 for Argo Blockchain Plc (ARBK). The halving phenomenon has resulted in a decrease in earnings in the Bitcoin mining sector.

This has led several BTC miners to shift their focus towards high-performance (HP) computing and artificial intelligence (AI) hosting, aimed at broadening their income sources and taking advantage of the increasing demand for AI and cloud computing infrastructure, the investment bank noted in its report, according to Coindesk.

June’s Rebound May Be A Sign of Things to Come?

However, June brought a glimmer of hope. The price of Bitcoin rose by around 2% in June, while the hash rate, which represents the total computational power dedicated to securing the Bitcoin network, fell by 5%. This one-two punch helped to improve profitability for miners.

Interestingly, U.S.-listed miners saw their share of the network hash rate increase from 19.1% to 20.8% in June, suggesting that miners in the United States are becoming more competitive on the global stage. Marathon Digital, a leading U.S. miner with the largest installed hash rate of 31.5 exahashes per second (EH/s), took the lead as the top Bitcoin producer in June, mining 590 BTC. However, this was still a 4% decrease from their May production figures, highlighting the ongoing challenges faced by miners.

The Road Ahead

While June’s profitability uptick is a welcome development for miners, it remains to be seen if this is a sustainable trend. The long-term viability of Bitcoin mining will depend on several factors, including the price of Bitcoin, the efficiency of mining rigs, and the overall hash rate of the network.

This evokes the question,” Is Bitcoin mining still profitable in 2024?”

The answer is yes, but it’s not as easy as it once was. Miners need to carefully consider their operating costs and factor in the price of Bitcoin to determine profitability. With the halving reducing block rewards, miners need to be more efficient than ever to stay afloat.

The future of Bitcoin mining is uncertain. The industry is facing a number of challenges, but it also has the potential to become more efficient and sustainable in the years to come.