Key Points
- Bitcoin (BTC) miners recorded lower profits in July due to a 6% drop in BTC price.
- US-based Bitcoin miners produced a larger share of BTC in July despite the challenging market conditions.
The latest survey from investment bank Jefferies reveals that Bitcoin (BTC) miners experienced a decrease in profits in July. This happened during a time when the price of Bitcoin, the world’s largest cryptocurrency, dropped by over 6%. Despite the price drop, the network hashrate remained steady. The hashrate, which reflects the combined computational power dedicated to mining Bitcoin, is a key indicator of competition and mining difficulty within the industry.
US Miners’ Increased Bitcoin Production
In response to the state of the Bitcoin mining industry, Jefferies reduced its price target for Marathon Digital Holdings Inc from $22 to $17. Previously in June, the bank had cut the MARA price target from $24 to $22. It also lowered its target for Argo Blockchain’s ADRs from $1.50 to $1.20 and its UK-listed shares from 11.90p to 9.5p.
Despite these adjustments, the bank maintained a hold rating on the MARA shares for July. Marathon Digital was the top Bitcoin producer in July, generating approximately 692 coins, marking a 17% increase from the previous month.
According to Jefferies’ report, US Bitcoin mining companies produced a larger share of BTC in July compared to June, accounting for about 21.1% of the total network. This was a slight increase from 20.7% in May, which was a challenging month for miners. Following this, Bitcoin mining profitability saw a positive shift in June.
Bitcoin Price Drop Challenges Miners
The issues for Bitcoin miners in July became evident at the start of the month when the BTC price fell. Bitcoin’s value dropped below the 200-day Simple Moving Average (SMA), a trend that typically indicates a downtrend pattern. At the time, Bitcoin’s price fell below $54,000. Mining giant F2Pool shared a graph showing that only about five mining rigs were profitable for their operators.
The graph showed that four Antminer rigs and one Avalon rig remained profitable as long as prices stayed above $53,100. Other mining rigs faced losses due to high operational costs that exceeded the earnings from rewards. Dovey Wan, a partner at digital assets fund Primitive Crypto, commented that “Bitcoin miners are (an) inch away from capitulation, S19 break even at 52k. This is a perfect setup for the local bottom.”
