Bitcoin Mining Economics Improved in the First Half of November: JPMorgan

As an analyst with over a decade of experience in the financial sector and a keen interest in cryptocurrencies, I must admit that the recent surge in Bitcoin mining profitability is both fascinating and promising. The 30% increase in hashprice within the first two weeks of November is a testament to the resilience and adaptability of this digital asset.

In simpler terms, according to a report published by JPMorgan on Monday, the economics of Bitcoin mining showed improvement during the initial part of November due to an increase in the price per hashing operation, often referred to as hashprice.

As an analyst, I’ve observed a significant boost in mining profitability, represented by the hashprice, over the past few weeks. This surge can be attributed to Bitcoin’s rally exceeding the growth rate of the network hashrate, coupled with an increase in transaction fees as a proportion of the block reward. In simpler terms, the increased value of Bitcoin and the rise in transaction fees have collectively contributed to a more profitable mining environment.

The total market cap of the mining stocks the bank tracks surged 33%, or around $8 billion, from Oct. 31 to Nov. 15 owing to “BTC gains and broader crypto optimism post election,” the authors wrote.

The price of Bitcoin, the most significant digital currency globally, increased by up to 30%, reaching new record highs, shortly after Donald Trump won the US presidency last week.

The network hashrate has risen 2% month-to-date to an average of 718 exahashes per second (EH/s), the report said. Hashrate refers to the total combined computational power used to mine and process transactions on a proof-of-work blockchain and is a proxy for competition in the industry and mining difficulty.

14 mines listed in the U.S., which are under the bank’s watch, currently make up approximately 28% of the entire global mining network. The proportion of the total mining network’s computational power (hashrate) controlled by these mines has persistently stayed at historic peaks.