Bitcoin Mining Profits Fall Despite Lower Network Hashrate

Bitcoin miners continue to face margin pressure, despite a noticeable decline in network competition. According to a recent JPMorgan report, Bitcoin’s average network hashrate fell for the second consecutive month in December. However, the expected relief for miners did not materialize.

JPMorgan analysts estimate that the monthly average hashrate declined by roughly 30 EH/s, or 3%, reaching about 1,045 EH/s. Hashrate represents the total computing power securing the Bitcoin network. A lower figure typically signals reduced competition, but current market conditions limit the upside.

Why Mining Profitability Keeps Declining

Despite reduced competition, mining profitability worsened. JPMorgan estimates show that average daily block reward revenue fell to about $38,700 per EH/s. This figure declined 7% month over month and dropped 32% year over year. It also marked the lowest level on record.

Gross profit from block rewards followed the same trend. Daily gross profit fell by roughly 9%, landing near $17,100 per EH/s. As a result, many miners now operate close to breakeven levels.

Several factors continue to weigh on the sector. Bitcoin prices remain below recent highs. The latest halving reduced block subsidies. At the same time, electricity costs have increased across multiple regions. Together, these pressures continue to squeeze mining margins.

Mining Stocks Show Mixed Performance

While operational profitability remains weak, equity markets tell a different story. The combined market capitalization of 14 U.S.-listed Bitcoin miners and data center operators reached $48 billion by year-end. This represents a 73% increase year over year.

Performance varied widely among companies. Hut 8 emerged as the top monthly performer with a 2% gain. In contrast, CleanSpark posted a sharp 33% decline. Over the full year, however, most tracked miners outperformed Bitcoin itself.

In summary, lower hashrate alone is not enough to restore profitability. Bitcoin mining remains highly sensitive to prices, energy costs, and long-term strategic shifts.

Read also: Bitcoin Difficulty Signals Limited Miner Capitulation