We do the research, you get the alpha!
Get exclusive reports and access to important insights on airdrops, NFTs, and more! Subscribe to Alpha Reports now and up your game!
Go to Alpha Reports
Publicly traded Bitcoin miners are trading at a remarkably high price compared to the value of BTC they have left to mine, according to JP Morgan.
In a Tuesday report, the banking giant compared the recent performance of 14 industry leaders in their hash rate and BTC production, while also assessing their dominance over the overall mining landscape.
“The aggregate market capitalization of the 14 US-listed Bitcoin miners we track increased by 29% ($6.4 billion) from June 30 to $28.3 billion on July 15,” wrote JP Morgan analyst Reginald L. Smith.
Among these companies, Cipher Mining (CIFR) was the best performer with a 44% increase, while the worst performer Stronghold Digital (SDIG) fell 8%. Apart from the latter, all miners in the group outperformed BTC in the last two weeks, which in itself increased by 6%.
Since miners earn their revenue directly in BTC, their earnings and stock performance are closely tied to the digital currency. That said, other miner-specific factors can affect their operations, including energy efficiency, competition from other miners, and Bitcoin’s quadrennial halving, which cuts the rate at which miners produce new BTC in half.
Since the last halving on April 19, Bitcoin’s total hash rate is still below around 60 exahashes per second (EH/s). Hash rate serves as a proxy for industry competition and mining difficulty, with a drop indicating that some miners have jumped ship.
That group doesn’t appear to include public miners, however, which JP Morgan says “added a total of 17 EH/s of capacity in June” — the largest monthly addition ever. That puts the cumulative hash rate of public miners at a record 157 EH/s, or about 26.6% of the global network hash rate, “which is encouraging and speaks to the efficiency of public operators.”
The larger the share of the total hash rate that large miners have, the more of the remaining Bitcoin supply they are likely to earn. However, even with record dominance over the industry, JP Morgan says that its projected future BTC earnings look woefully low compared to how the market is pricing them today.
“The aggregate market capitalization of the 14 largest U.S.-listed miners is about 131% as large as their relative share of the nominal value of all remaining Bitcoin,” Smith wrote. By comparison, the average ratio of miner market capitalization to remaining BTC has been 78% since January 2022.
A look at Bitcoin’s “hash price” — a measure of the overall profitability of Bitcoin mining — is also dismal, down more than 50% from pre-halving levels.
According to JP Morgan, the mining companies that mined the most BTC in June per unit of hash rate deployed were Hive Digital (HIVE) and Bitfarms (BITF).
Edited by Ryan Ozawa.
Daily Debriefing Newsletter
Start each day with the latest news, plus original articles, a podcast, videos and more.
Fuente
