Investing.com: Mining stocks outperformed the underlying cryptocurrency in June, boosted by enthusiasm around AI data centers, the value of energy access and a decline in the network hash rate.
According to a note from JPMorgan dated Monday, these factors contributed to a 19% sequential increase in the aggregate market capitalization of 14 U.S.-listed bitcoin miners, which reached $22 billion.
The investment bank highlighted several key factors behind this rally. First, AI data centers emerged as a more lucrative use case for mining facilities. Second, the scarcity and value of energy access has become more apparent. Lastly, a decline in the network hash rate modestly improved mining economics for U.S.-listed operators, although profitability is still nearly 50% below pre-halving levels.
Despite an overall decline, the average Bitcoin price in June hovered around $66,000, up just 1% from May. However, it ended the month with a seven-day moving average of $61,200, down 11% from the previous month's figure.
The network’s hash rate, an indicator of industry competition, declined for the second consecutive month, averaging 583 EH/s in June. This marks a 3% decrease from the previous month and a massive drop from pre-halving levels. Mining difficulty has also declined by 1% since the end of May.
Mining profitability showed a modest improvement, with miners earning an average of $52,000 per EH/s in daily block reward revenue in June, up 6% month-over-month. However, this is still well below the peak of $342,000 in November 2021, when Bitcoin prices were $60,000 and the network hash rate was 161 EH/s.
JPMorgan notes that the group of 14 US-listed miners had an aggregate market capitalization of $21.9 billion as of June 30, with Terawulf Inc (NASDAQ:) the best performer, up 117%, and Argo Blockchain (NASDAQ:) the worst performer, down 17%.
“Almost all tracked miners outperformed Bitcoin in June, reflecting market enthusiasm for AI data centers and the scarcity and value of energy access,” JPMorgan said.
JPMorgan analysis reveals that the aggregate market capitalization of the 14 largest publicly traded bitcoin miners in the United States has been, on average, 17% of the face value of all remaining bitcoins since January 2022. This proportion peaked at 29% in December 2023 and was 28% as of June 30. The aggregate market capitalization of these miners, which account for 24% of the network’s total hash rate, is roughly 28% as large as the face value of all remaining bitcoins.
Finally, the report compares the market capitalization of these bitcoin mining operators to the four-year renewable block reward revenue opportunity, which matches the lifespan of mining hardware. This ratio peaked at 57% in December 2023 and was 55% as of May 31, up 13 points sequentially, versus an average of 33% since January 2022.
