Bitcoin (BTC) mining shares are struggling as declining cryptocurrency costs add additional strain to enterprise fashions strained by the Bitcoin community’s April halving, in line with 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 similar to Riot Platforms (RIOT), Bitdeer (BTDR), Marathon Digital (MARA) and Core Scientific (CORZ) reported their fourth-quarter 2024 earnings in February.
Nearly all of them noticed post-earnings inventory value declines, together with Core Scientific, which reported better-than-expected This fall revenues.
Bitcoin’s value versus the community’s hashrate. Supply: JPMorgan
Associated: Analysts eye Bitcoin miners’ AI, chip gross sales forward of This fall earnings
Halving woes
Each 4 years, the variety of BTC mined per “block” — a bundle of transaction knowledge saved on the blockchain — is decreased by half. The April halving occasion decreased mining rewards from 6.25 BTC to three.125 BTC per block.
Because the halving, mining revenues and gross income 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 income 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.
Stress on AI companies
Miners are optimistic that adjoining enterprise strains — 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 below pressure, JPMorgan famous.
“Operators with HPC publicity additionally felt strain 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 capable of produce outcomes akin to US market leaders similar to OpenAI’s ChatGPT for a fraction of the price.
Regardless of the setback, mining shares with intensive AI publicity, similar to Hut 8, are nonetheless extra richly valued than friends, JPMorgan mentioned.
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