Bitcoin (BTC) mining shares are struggling as declining cryptocurrency costs add additional stress to enterprise fashions strained by the Bitcoin community’s April halving, based on a JPMorgan analysis notice shared with Cointelegraph.
Mining shares tracked by JPMorgan collectively shed 22% in market capitalization in February as Bitcoin’s falling value eroded mining economics, the March 3 report mentioned.
Mining shares corresponding to Riot Platforms (RIOT), Bitdeer (BTDR), Marathon Digital (MARA) and Core Scientific (CORZ) reported their fourth-quarter 2024 earnings in February.
Just about all of them noticed post-earnings inventory value declines, together with Core Scientific, which reported better-than-expected This autumn revenues.
Bitcoin’s value versus the community’s hashrate. Supply: JPMorgan
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Halving woes
Each 4 years, the variety of BTC mined per “block” — a bundle of transaction knowledge saved on the blockchain — is lowered by half. The April halving occasion lowered mining rewards from 6.25 BTC to three.125 BTC per block.
Because the halving, mining revenues and gross earnings have dropped by a median of 46% and 57%, respectively, JPMorgan mentioned.
In the meantime, decrease Bitcoin costs contributed to a 9% drop in gross earnings in February, the analysts mentioned.
Macroeconomic uncertainty — together with fears of a looming commerce struggle — has rattled markets since US President Donald Trump took workplace in January and introduced 25% tariffs on Canada and Mexico.
Strain on AI companies
Miners are optimistic that adjoining enterprise traces — together with leasing out high-performance {hardware} to AI fashions and promoting specialised ASIC microchips — will greater than offset any income losses.
However even miners cashing in on demand for high-performance computing (HPC) from synthetic intelligence fashions are beneath pressure, JPMorgan famous.
“Operators with HPC publicity additionally felt stress following the DeepSeek announcement and questions round near-term demand for knowledge middle capability,” the analysts mentioned.
In January, AI-related shares took successful when the Chinese language AI firm Deepseek claimed its AI fashions have been in a position to produce outcomes akin to US market leaders corresponding to OpenAI’s ChatGPT for a fraction of the fee.
Regardless of the setback, mining shares with intensive AI publicity, corresponding to Hut 8, are nonetheless extra richly valued than friends, JPMorgan mentioned.
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