The Bitcoin network experienced a significant milestone in October. The Bitcoin hashrate hits new record, reaching a monthly average of 1,082 exahashes per second (EH/s). This information comes from a recent report published by the investment bank JPMorgan. The increase represents a 5% growth in the average monthly hashrate.
The report, authored by analysts Reginald Smith and Charles Pearce, details the increase in competition. At the end of last month, mining difficulty was 3% higher than at the close of September. Furthermore, this figure is an impressive 80% higher than the difficulty recorded just before the last halving. This key event, which reduces block rewards, took place in April 2024.
The hashrate is a vital metric for the network. It measures the total combined computational power used to mine and process transactions. Therefore, a higher hashrate indicates a more secure network and greater competition among miners. However, this growing difficulty places significant pressure on profitability. The JPMorgan report notes that mining economics were pressured for the third consecutive month.
Why are mining stocks rising if profitability is falling?
Despite the Bitcoin hashrate hits new record, miner revenues decreased. Analysts estimated that miners earned an average of $48,000 per EH/s in daily revenue in October. This is 3% less than in September, while daily gross profit fell by 4%. Nonetheless, the stock market reacted oppositely. The combined market capitalization of 14 US-listed mining companies increased by 25%, adding $14 billion.
This apparent decoupling is largely attributed to the sector’s enthusiasm for artificial intelligence (AI). Many investors are betting on the miners’ pivot to high-performance computing (HPC). For example, Cipher Mining (CIFR) led the group with a 48% rise last month. In contrast, Cango (CANG) was the only one to underperform bitcoin, with a 5% decline. This trend suggests that investors increasingly value revenue diversification beyond pure mining.
