The profitability of mining for Bitcoin (BTC) declined in August, according to a new report from Jefferies Financial Group (JEF).
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Mining profitability for Bitcoin declined 5% during August due to an increase in the network hashrate, says investment bank Jefferies. “A hypothetical one EH/s fleet of BTC miners would have generated ~$55k/day in revenue during August, vs ~$58k/day in July and ~$44k a year ago,” wrote Jonathan Petersen, a top four-star rated analyst.
Hashrate refers to the total computational power used to mine and process transactions on a proof-of-work blockchain, and is a proxy for competition in the industry, as well as mining difficulty. In all, U.S.-listed crypto mining companies mined 3,573 Bitcoin in August versus 3,598 in July. And those digital asset miners accounted for 26% of the Bitcoin network last month, unchanged from July.
Slumping Price
Among Bitcoin miners, MARA Holdings (MARA) produced the most Bitcoin in August followed by IREN (IREN), said Jefferies. MARA’s hashrate is still the largest among U.S. crypto miners at 59.4 EH/s, with CleanSpark (CLSK) second at 50 EH/s, noted analyst Petersen.
The drop in Bitcoin mining profitability also coincided with a slide in the price of the largest cryptocurrency by market capitalization. BTC’s price fell from a record high of just over $124,000 in mid-August to below $110,000 at the start of September, making mining for digital assets less lucrative.
Is BTC a Buy?
Most Wall Street firms don’t offer ratings or price targets on cryptocurrencies such as Bitcoin, so we’ll look instead at its three-month performance. As one can see in the chart below, the price of BTC has risen 7.35% in the last 12 weeks.
