Mining margins weaken as hash price declines and rig payback periods stretch, even as listed miners rally on analyst upgrades and new HPC agreements.
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Profitability across the Bitcoin mining industry is facing new strain amid rising network competition and declining revenue conditions.
Bitcoin miners are facing a fresh squeeze as the network’s hashrate — a measure of the total computing power competing to secure the Bitcoin network — climbed to a record 1.16 ZH/s in October while Bitcoin’s () price fell toward $81,000 entering November, according to a by The Miner Mag.
Hashprice, which tracks miner revenue per unit of computing power, fell below $35 per hash, dropping under the $45/PH/s median total hashprice reported by public mining companies. The decline leaves several operators approaching breakeven levels.
The report noted that payback periods for mining rigs have stretched beyond 1,200 days, while financing costs continue to rise across the sector, adding further strain.
The downturn follows a relatively stable third quarter, during which the hash price averaged about $55/PH/s, driven by BTC trading near $110,000. Rising competition on the network and a drop in Bitcoin’s price entering November have pushed mining profitability to its weakest levels on record.
The financial strain has also coincided with a surge in miner borrowing, driven first by a wave of near-zero-coupon convertible bonds in the past quarter.
While miners are accelerating their pivot into AI and high-power computing (HPC), the revenue from these services remains too small to meaningfully offset the sharp drop in Bitcoin mining income, according to the report.
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Despite the sector’s tightening economics, the top ten publicly traded miners were all higher over the past 24 hours, with CleanSpark, Cipher Mining and IREN posting double-digit gains on Monday.
The surge followed a JPMorgan research raising price targets for the three miners, pointing to a surge in long-term HPC and cloud deals across the sector.
JPMorgan said Cipher’s share price had fallen roughly 45% from its peak, creating a more attractive entry point, and noted that the company was “well-positioned” to sign additional deals with HPC tenants.
In November, with Microsoft, giving the tech giant access to Nvidia GB300 GPUs hosted in IREN’s data centers
The bank trimmed its estimates for Marathon Digital and Riot, arguing that lower Bitcoin prices and larger share counts are weighing on the two miners’ sizable coin inventories.
The surge in miner stocks also coincided with a mild rebound in the price of Bitcoin, which rose around 2% over the past 24 hours and was trading at around $89,000, according to CoinGecko at the time of writing.
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