According to a new research report from U.S. bank JPMorgan Chase (JPM), the profitability of Bitcoin (BTC) mining has declined to an all-time low.
In its analysis, JPMorgan says that the network hashrate has risen sharply in recent months, pushing the profitability of Bitcoin mining down to record low levels.
Hashrate refers to the computational power that is used to mine and process Bitcoin transactions on a proof-of-work blockchain.
Essentially, miners use large banks of computers to run complex mathematical problems around the clock. As each problem is resolved, miners earn a Bitcoin.
Running such large banks of computers is energy intensive and expensive. The rise in hashrate has made mining for Bitcoin increasingly less profitable, argues JPMorgan in its research report.
The hash price, a measure of mining profitability, is currently around 30% lower than the levels seen in December 2022 when the crypto market last peaked.
The stock prices of publicly traded cryptocurrency mining companies have steadily declined in recent months since Bitcoin underwent a halving event in April.
A halving event is when the available supply of a digital asset such as Bitcoin, and the rewards for mining it, are cut in half.
The total market capitalization of the largest U.S. crypto miners has lost a combined 18% since the end of July, notes JPMorgan Chase.
Bitcoin’s price has decreased 5% since the April halving event, but is still up 33% year-to-date and currently trading at $58,500 U.S.
The stock of JPMorgan Chase has gained 24% so far this year and currently trades at $213.97 U.S. per share.
