Bitcoin mining profitability took a hit in September, driven by a 1.7% increase in network hashrate and stagnant cryptocurrency prices, according to a report from Jefferies.
Despite Bitcoin’s relatively stable price, miners faced declining revenues as operational costs and network difficulties surged.
As the competition among miners grows, October is expected to bring even more challenges, with further increases in hashrate potentially offsetting recent price gains.
BTC mining revenue declines 2.6%
In September, Bitcoin (BTC) miners experienced a 2.6% drop in average daily revenue per exahash, despite stable cryptocurrency prices.
The network hashrate, which measures the total computational power contributed by miners, rose by 1.7% compared to August.
This higher hashrate made the mining environment more competitive, cutting into profitability even with consistent Bitcoin prices.
Looking ahead, October may prove even tougher for miners.
While Bitcoin prices have increased by approximately 5% so far this month, an 11% surge in the network hashrate threatens to offset any potential revenue gains.
As network difficulty rises, the challenge of maintaining profitability is expected to intensify.
North American miners expand market share
North American-listed mining companies increased their share of Bitcoin mining operations, accounting for 22.2% of the total network in September, up from 19.9% in August.
Cooler temperatures improved operational efficiency, allowing for higher uptime and better overall performance.
Marathon Digital (MARA) led the region by mining 705 BTC in September, while CleanSpark (CLSK) followed with 493 BTC, both benefiting from improved weather conditions.
Marathon Digital continued to dominate the North American mining sector, ending September with the largest installed hashrate of 36.9 exahashes per second (EH/s).
Riot Platforms (RIOT) secured the second-largest hashrate at 28.2 EH/s, positioning both companies as key players in the industry.
BTC price gains threatened by hashrate surge
Jefferies analysts Jonathan Petersen and Joe Dickstein warn that Bitcoin miners face increasingly difficult conditions.
Although Bitcoin prices have grown by about 5% in October, the 11% spike in hashrate suggests that miners will struggle to capitalize on these gains.
As competition heightens, mining profitability is expected to remain under pressure.
The report also touched on the potential for regulatory changes in the Bitcoin mining sector.
As the “Bitcoin election” nears its conclusion, Jefferies suggests that more favorable policies toward cryptocurrency mining could be on the horizon, providing some relief for companies grappling with rising costs and stiffening competition.
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