JPMorgan Sounds Alarm as Bitcoin Mining Firms See $6B Market Cap Wipeout
Fourteen publicly traded U.S. Bitcoin mining firms saw their combined market capitalization fall by 25% in March, amounting to approximately $6 billion, according to a JPMorgan report.
Also read: Bitcoin Mining Explained: Everything You Need To Know
The decline ranks as the sector’s third-worst monthly performance since the bank began tracking in late 2023. Cipher Mining saw its stock fall by 45%, and Stronghold Digital Mining posted a slide of only 2% loss, outperforming Bitcoin’s price movement.
The Bitcoin Mining Sector Hits Turning Point with Valuations at Post-FTX Lows
The March decline was caused by a 13% reduction in revenue per exahash per second (EH/s), falling to $47,300, and a 22% drop in daily block reward gross profit to $23,000 per EH/s.
Bitcoin network hashrate (Source: Blockchain.com)
The network hashrate increased to 816 EH/s by month-end, up from 811 EH/s mid-March, a sign of increased competition. These metrics align with JPMorgan’s view of deteriorating mining economics.
JPMorgan commented that Bitcoin miner valuations relative to block rewards are at their lowest since the FTX collapse in November 2023. Miners with exposure to high-performance computing (HPC) lagged behind pure-play counterparts for the second consecutive month, confirming diversification has yet to mitigate global market challenges.
Also read: Hut 8 Partners with Trump Sons to Launch World’s Largest Bitcoin Mining Venture
Uncertainty Looms as Bitcoin Price Volatility Tests Miners
The $6 billion market capitalization hit in March marks a critical turning point for the sector. Stronghold Digital Mining was a rare outperformer against Bitcoin, while most firms saw valuations sink to post-FTX lows.
Also read: Is Mining Bitcoin Illegal: Everything You Need to Know?
The 23% fall in Bitcoin’s price, from its $109,000 peak, settling between $80,000 and $85,000 by late March, also posed additional pressure on miners’ revenues.
Bitcoin price chart (Source: CoinMarketCap)
With the recent volatility, investors now proceed with caution, with no immediate recovery in sight at the moment. The path forward now depends on Bitcoin’s price movement and operational efficiency, positioning April as an important month.
