- Bitcoin miners facing hardships due to reduced mining rewards, finds JP Morgan.
- JP Morgan expects Riot and Iren stock prices to climb in the coming months.
As a seasoned crypto investor with a knack for spotting trends and understanding market dynamics, I find the recent report by JP Morgan intriguing. The struggles of Bitcoin miners due to reduced mining rewards and increased electricity costs are not surprising, given my own experiences with the volatile nature of this digital gold rush.
As per a recent report from JP Morgan, Bitcoin miners are finding it tough to maintain their pace following the Bitcoin halving event due to decreased rewards and rising electricity expenses that are eating into their profits. The Bitcoin halving which took place on April 20th saw mining rewards decrease by half, going down from 6.25 Bitcoins to 3.125 Bitcoins.
Miners must boost the amount of Bitcoin they produce in order to raise their income, and major players such as Marathon Digital, Riot Platforms, and CleanSpark are actively participating in mergers and acquisitions (M&A) for this purpose. Wealthy miners like these are buying up other mining companies to enhance their power capacity and raise their hashrates. Additionally, some miners are negotiating agreements with local governments to obtain more power at reduced prices.
The recently published JP Morgan report focused on five publicly traded U.S. mining companies: Marathon Digital, Riot Platforms, CleanSpark, Iren, and Cipher. Together, they mined a total of 5,854 bitcoins in Q2 of this year, marking a 28% drop compared to the previous quarter. Notably, Marathon was the top performer, mining an impressive 2056 bitcoins on its own. CleanSpark came in second, accounting for 27% of the total bitcoins mined during that period. Moreover, CleanSpark boosted its market share by investing a substantial $231 million in capital expenditure over the quarter.
JP Morgan Feels Riot and Iren Stocks Are Undervalued
JP Morgan has indicated that they favor the stocks of both Iren and Riot, believing their current share prices are underestimated, offering investors a potential purchasing opportunity. Recently, Riot’s performance has decreased due to reduced rewards and operational challenges. However, JP Morgan anticipates Riot will improve in the near future as it navigates these difficulties. Additionally, they mentioned that Iren experienced falling stock prices because of increased costs related to hedging losses. Yet, JP Morgan predicts an uptick in Iren’s price once adjustments are made.
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2024-08-25 20:14