- Investors continue to pay a premium for miners diversifying into AI and HPC data centers, despite pure-play miners gaining market share.Marathon, Riot and CleanSpark all saw higher production numbers in September than August.Marathon produced more bitcoin in September than in any other month since the April halving.
As a seasoned crypto investor with a keen eye for market trends and a knack for spotting opportunities, I’ve witnessed my fair share of market fluctuations and shifts over the years. September was no exception to the rollercoaster ride that is the crypto market.
Disclosure: The author of this story owns shares of the following bitcoin miners: IREN (IREN), MARA Holdings (MARA), Cipher Mining (CIFR), Bitfarms (BITF), Riot Platforms (RIOT) and CleanSpark (CLSK).
That was the tale of mining in September, anyway, in terms of equity returns.
As an analyst, I observed a significant growth in the share of mined bitcoins for three key players – MARA Holdings (MARA), Riot Platforms (RIOT), and CleanSpark (CLSK) – last month compared to August. These companies, boasting robust financial structures and expansive mining operations, are effectively managing the dip in mining profitability following the bitcoin halving in April.
It’s not surprising that investor opinions have changed, given the Bitcoin halving in April, which lowered by half the reward for mining Bitcoin. This change has made mining more competitive and narrowed profit margins. Furthermore, the recent approval of U.S. spot bitcoin exchange-traded funds (ETFs) might be dampening investors’ interest in mining stocks.
Miners such as Riot Blockchain and Cipher Mining have seen significant gains in October – a period often referred to as “Uptober” due to Bitcoin’s historical strength – even though Bitcoin itself has remained relatively stable. Riot Blockchain is up by 12% while Cipher Mining (CIFR) has climbed by 8%.
September’s takeaway
Mining economics are tough after the halving.
Over a seven-day span, the hashrate of the Bitcoin network peaked at an unprecedented level of 693 quadrillion hashes per second (EH/s), with an average hash rate holding steady around 630 EH/s. Hashrate serves as a gauge for mining competition, indicating the amount of processing power active on the network.
As an analyst, I observed that in September, the difficulty of mining a new Bitcoin block reached an unprecedented peak. This measure, which adjusts approximately every 2,016 blocks and is influenced by the network’s computational power, ensures that blocks are consistently mined every 10 minutes. Simultaneously, the hashprice – a metric indicating miner profitability – climbed to a one-month high of $48.0 PH/s, as reported by Glassnode, despite persisting near its all-time lows.
In September, Riot Platforms – the third-largest miner in terms of market value – boosted its mined bitcoin by a substantial 28%, thanks to enhancing its computing power throughout its operations. Anticipating a hashrate of 36.3 exahashes per second (EH/s) by the end of 2024 and 56.6 EH/s in the second half of 2025, Riot currently holds approximately 10,427 bitcoins on its books.
- Among other trends that stood out during September include impact from Hurricane Helene. CleanSpark, the fourth-largest miner by market cap, was among that were affected. The company said it didn’t see any material losses to its infrastructures but had to shut down some operations due to the storm.With tough capital markets for bitcoin miners, the companies started to use creative means of raising funds to grow their operations. One, Cipher Mining, stood out in September by mining 155 BTC for the month and selling 923 bitcoin to buy a 300MW mining site, which will be used for HPC hosting. The miner now owns 1,512 BTC.
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2024-10-08 15:55