The stocks of Bitcoin mining companies exploded 29% in July, trading fairly higher relative to BTC mined, JP Morgan disclosed.
Global banking giant JP Morgan reports that Bitcoin miners trade higher than the BTC value they are mining. The Tuesday report by JP Morgan comparatively evaluates the performance of 14 miners relative to their BTC production and hash rate. Besides, the report examines the dominance of such miners in the overall mining space.
The aggregate market capitalization for 14 listed miners in the US rose 29% from $6.4 billion on June 30 to $28.3 billion on Monday, July 15, clarified JP Morgan analyst Reginald Smith.
Cipher Mining Performance Up 44%
Cipher Mining (CIFR) topped the performance with a 44% rise, coincidentally when Stronghold Digital (SDIG) performed the worst, tumbling by 8%. With the exception of SDIG, other miners outperformed the 6% Bitcoin value gain over the past two weeks.
According to JP Morgan, miners derive earnings from BTC sales, thus leaving their revenue and stock performance joined at the hip with the crypto. Nonetheless, miners face specific factors influencing their operations, such as energy efficiency and competition. Additionally, quadrennial halving influences performance since it cuts the BTC production by half every four years.
Since the April 19 halving, the aggregate hash rate for Bitcoin plunged to 60 exahashes per second (EH/s). Notably, the hash rate involves the proxy tracking industry competition and difficulty in mining. A decline in hash rate signals several miners jumped ship.
The bunch excluded public miners, which JP Morgan observed added 17 EH/s of capacity last month. Such a market has the highest addition, lifting the cumulative hash rate of public miners to a historic 157 EH/s. Such constitutes 26.6% of the global hash rate, thereby affirming improved efficiency by the public operators. JP Morgan’s analyst Charles Pearce noted that the addition represented a healthy 2.4% gain for the US-listed miners since late June and 5.6% since the April 19 halving.
Earlier this month, Bitcoin mining difficulty declined to signal that the BTC price was approaching floor levels. While the Bitcoin miners appeared to struggle, the historical data indicated a potentially bullish signal for the BTC price.
Since the peak was realized in late May, the total hash rate plummeted from 658 EH/s to 556 EH/s by June 28, per the Hash Rate Index. Hash rate involves the metric of miners’ effort to secure the Bitcoin network, thus signaling mining competitiveness.
Discouraging BTC Hash Price
A greater share of the hash rate that the miner has indicates more BTCs remaining in the supply one could earn. Nonetheless, JP Morgan projects that subsequent BTC earnings are awfully low relative to their present pricing.
JP Morgan’s analyst observed that the aggregate market value of all 14 largest miners listed in the US approximates 131% of the relative share of BTC in nominal value. Comparatively, the average market cap of each miner relative to the remaining BTC supply is 78% since January 2022.
JP Morgan report indicates that evaluating Bitcoin’s hashprice is discouraging. The metric that measures the profitability of BTC mining is down by over half per the pre-halving levels.
The banking giant’s report discloses the miners behind the largest BTC production last month relative to the unit hash rate deployed are Hive Digital (HIVE) and Bitfarms (BITF).