Coinspeaker
Bitcoin Miners Record Less Profit in July amidst BTC Price Plummet
A recent survey by investment bank Jefferies showed that Bitcoin (BTC) miners made less profit in July compared to the previous month. This coincided with the period when the price of the world’s largest cryptocurrency fell over 6%, and the network hashrate remained stable. For perspective, hashrate, a measure of the combined computational power dedicated to mining Bitcoin, serves as a proxy for competition within the industry and mining difficulty.
US Bitcoin Miners Produce Larger Share in July
Due to the state of the Bitcoin mining sector, Jefferies cut its price target for Marathon Digital Holdings Inc (NASDAQ: MARA) to $17 from $22. It is worth noting that the bank cut the MARA price target to $22 from $24 in June. It also lowered its target for Argo Blockchain’s ADRs (ARBK) from $1.50 to $1.20 and its UK-listed shares (ARB) from 11.90p to 9.5p or roughly 12 cents.
However, it maintained a hold rating on the MARA shares for July. Marathon Digital was the highest Bitcoin producer in July, with approximately 692 coins, or 17% more than the month before.
Compared to June, United States Bitcoin mining companies generally produced a larger share of BTC in July. According to the bank’s report, it accounted for about 21.1% of the total network versus 20.7% in May, a rough month for miners. After that, Bitcoin mining profitability took a positive turn in June.
“June was a month of modest recovery from the immediate impacts of the halving that were most pronounced in May,” stated analyst Jonathan Petersen in an earlier Jefferies report.
Based on the current outlook of the industry. August may pass as a more difficult month for the miners. This is due to the 5% drop in the price of Bitcoin and the increasing network hashrate. Bitcoin is trading at $58,462.20 after losing 4.49% of its previous value within 24 hours.
BTC Price Plunge Put Miners at a Loss
Bitcoin mining woes for July became imminent when the BTC price plummeted at the beginning of the month. Bitcoin dropped below the 200-day Simple Moving Average (SMA), and when this happens constantly, it is assumed to be following a downtrend pattern. The firstborn coin saw a level below $54,000 at the time. Mining giant F2Pool shared a graph showing that only about five mining rigs recorded gains from their operators.
The graph highlighted four Antminer rigs and one Avalon rig registered profit. They remained so as long as prices stayed above $53,100. Other mining rigs stood at a loss due to high running costs that outweighed operators’ earnings in the form of rewards.
This led Dovey Wan, a partner at digital assets fund Primitive Crypto, to say that “Bitcoin miners are (an) inch away from capitulation, S19 break even at 52k. This is a perfect setup for the local bottom.”
Bitcoin Miners Record Less Profit in July amidst BTC Price Plummet
