Mining economics tighten as record hashrate meets falling Bitcoin price: Report
Analysis
Price Impact
MedThe tightening bitcoin mining economics, driven by record hashrate and a falling btc price, suggest increased pressure on miners. this could lead to a sell-off by less efficient miners to cover operational costs and debt, exerting downward pressure on btc. however, the market has shown a mixed reaction, with a slight btc price rebound and a rally in public miner stocks due to analyst upgrades and new hpc deals, somewhat offsetting immediate negative sentiment.
Trustworthiness
HighThe report from the miner mag, cited by cointelegraph, is a reputable source for mining data. further reinforced by analysis from jpmorgan regarding publicly traded miners and their pivot to hpc.
Price Direction
NeutralWhile fundamental mining economics suggest a bearish outlook due to reduced profitability, the immediate market reaction saw a mild btc price rebound. the rally in publicly traded miner stocks, driven by factors like ai/hpc pivot and analyst upgrades, creates a short-term positive sentiment that might temporarily outweigh the underlying pressure from tightening mining margins. the overall direction is uncertain as these opposing forces balance out.
Time Effect
LongThe reported issues of tightening mining margins, declining hashprice, and stretching rig payback periods beyond 1,200 days represent a sustained, long-term challenge for the mining industry. while there might be short-term market reactions, the fundamental economic strain on miners is an ongoing structural issue that could exert continued pressure on btc price as less profitable operations struggle or exit.
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Nate Kostar 3 minutes ago Mining economics tighten as record hashrate meets falling Bitcoin price: Report Mining margins weaken as hash price declines and rig payback periods stretch, even as listed miners rally on analyst upgrades and new HPC agreements. Listen 0:00 45 News COINTELEGRAPH IN YOUR SOCIAL FEED Profitability across the Bitcoin mining industry is facing new strain amid rising network competition and declining revenue conditions. Bitcoin miners are facing a fresh squeeze as the network’s hashrate — a measure of the total computing power competing to secure the Bitcoin network — climbed to a record 1.16 ZH/s in October while Bitcoin’s ( BTC ) price fell toward $81,000 entering November, according to a report by The Miner Mag. Hashprice, which tracks miner revenue per unit of computing power, fell below $35 per hash, dropping under the $45/PH/s median total hashprice reported by public mining companies. The decline leaves several operators approaching breakeven levels. The report noted that payback periods for mining rigs have stretched beyond 1,200 days, while financing costs continue to rise across the sector, adding further strain. Source: The Miner Mag The downturn follows a relatively stable third quarter, during which the hash price averaged about $55/PH/s, driven by BTC trading near $110,000. Rising competition on the network and a drop in Bitcoin’s price entering November have pushed mining profitability to its weakest levels on record. The financial strain has also coincided with a surge in miner borrowing, driven first by a wave of near-zero-coupon convertible bonds in the past quarter. While miners are accelerating their pivot into AI and high-power computing (HPC), the revenue from these services remains too small to meaningfully offset the sharp drop in Bitcoin mining income, according to the report. Related: ‘Extremely lucky’ solo Bitcoin miner beats massive odds to win $266K Stocks surge after JPMorgan price targets Despite the sector’s tightening economics, the top ten publicly traded miners were all higher over the past 24 hours, with CleanSpark, Cipher Mining and IREN posting double-digit gains on Monday. The surge followed a JPMorgan research note raising price targets for the three miners, pointing to a surge in long-term HPC and cloud deals across the sector. Publicly traded Bitcoin miners by market cap. Source: Bitcoin Mining Stock JPMorgan said Cipher’s share price had fallen roughly 45% from its peak, creating a more attractive entry point, and noted that the company was “well-positioned” to sign additional deals with HPC tenants. In November, IREN signed a five-year, $9.7 billion GPU cloud services deal with Microsoft, giving the tech giant access to Nvidia GB300 GPUs hosted in IREN’s data centers The bank trimmed its estimates for Marathon Digital and Riot, arguing that lower Bitcoin prices and larger share counts are weighing on the two miners’ sizable coin inventories. The surge in miner stocks also coincided with a mild rebound in the price of Bitcoin, which rose around 2% over the past 24 hours and was trading at around $89,000, according to CoinGecko data at the time of writing. Magazine: Bitcoin miners steamrolled after electricity thefts, exchange ‘closure’ scam: Asia Express # Bitcoin # Bitcoin Mining # Stocks Add reaction