Halving Effects Subdues: Bitcoin Mining Profitability Rebounds in June


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Bitcoin mining saw a significant rise in profitability in June compared to May, thanks to a 2% gain in the cryptocurrency’s price and a 5% decrease in network hashrate. According to a recent study report from Jefferies investment bank, market movements following the halving have been critical in driving this recovery.

Analyst Jonathan Petersen said that June saw a slight recovery from the early effects of the halving, which had a huge impact in May. The halving, a quadrennial event that took place in April, cut miners’ rewards by 50%.

A Reduction in Competition

Hashrate, a measure of the overall processing power required to mine and process transactions on a proof-of-work blockchain, is used to evaluate competitiveness and mining difficulty. The reduction in hashrate in June signaled a short reduction in competition among miners, making Bitcoin mining marginally easier and more profitable.

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The report also highlighted Bitcoin miners’ strategic shift into high-performance computing (HPC) and artificial intelligence (AI) hosting. Miners are hoping to benefit from the growing demand of AI and cloud computing infrastructure by diversifying their revenue streams. This further increases the sustainability of their operations in the competitive bitcoin mining market.

However, a recent post by CryptoQuant states that the Bitcoin miners are aggressively selling their holdings. This metric is nearing levels achieved during the bear market in late 2022.

Bitcoin Mining Boosts

In terms of production, US-listed mining businesses boosted the amount of new Bitcoin in June, accounting for 20.8% of the overall network, up from 19.1% in May. Marathon Digital led the pack, mining 590 Bitcoins in June, despite a 4% drop from May. CleanSpark (CLSK) mined 445 Bitcoins, which represents a 7% increase from the previous month.

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Moreover, Marathon’s installed hashrate remains the highest among US-listed miners, at 31.5 exahashes per second (EH/S). Riot Platforms (RIOT) follows with a hashrate of 22 EH/s.

New Price Target

Meanwhile, Jefferies changed its price targets for many bitcoin mining companies. The bank decreased Marathon Digital’s (MARA) price estimate from $24 to $22. Similarly, it reduced its price estimate for Argo Blockchain ADRs (ARBK) from $1.50 to $1.20, and for its U.K. traded shares (ARB) from 11.90p (12 cents) to 9.5p. Despite these changes, Jefferies maintained its hold rating for the business. Notably, one ADR is equivalent to ten shares, demonstrating the magnitude of these changes.

Bitcoin is currently trading around $57,300, down by more than 17% in the last 30 days. The largest cryptocurrency achieved its all-time high of $73,750 on March 14, weeks before the halving event.

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