US Miners Boost Global Bitcoin Hashrate

Profitability falls amid rising competition

According to a recent JPMorgan report, U.S.-listed bitcoin miners now account for a striking 29% of the global network hashrate—a figure that has nearly doubled from a year ago. The report revealed that the combined hash power of 14 tracked companies surged by approximately 95% year-over-year, reaching 244 exahashes per second (EH/s), while the overall Bitcoin network hashrate increased by 45% over the same period.

The report, published on Tuesday, noted that the Bitcoin network's hashrate climbed by 6% in February, intensifying competition within the mining industry. However, this surge in mining power comes with a cost. As the network expands, mining economics are coming under pressure. "Average bitcoin price also declined modestly from January, pressuring mining economics," wrote JPMorgan analysts Reginald Smith and Charles Pearce.

Daily mining profitability has taken a hit, dropping by 13% from the end of January. This decrease is mirrored in the hashprice—the metric that measures daily mining rewards—underscoring the challenging environment for miners. In fact, miners earned around $53,600 in daily block rewards this month, which is 6% lower than January's figures.

Despite the impressive rise in hash power, the market valuation of U.S. bitcoin mining stocks appears to be faltering slightly, with a 1% decline compared to the previous month. On the individual front, IREN made notable gains, outperforming with a 27% increase in the first two weeks of February, whereas Greenidge Generation lagged with a 20% drop.

A recent analysis by broker Bernstein pointed out that U.S. bitcoin mining stocks are increasingly capturing a larger share of the network hashrate—a trend that could further reshape the competitive landscape of the industry.

"As miners ramp up their operations to capture more of the network, the downward pressure on profitability becomes an inevitable challenge," commented one market observer. "This dynamic signals that while technological and operational growth continues, the economic returns may not keep pace if the Bitcoin price remains subdued."

These evolving trends highlight the delicate balance between scaling up operations and maintaining profitability in an industry that is both fiercely competitive and subject to the volatile nature of cryptocurrency markets. Investors and industry participants alike will be watching closely as these factors continue to influence the future of Bitcoin mining.

photo / Blockonome