Jefferies Warns: Bitcoin Mining Profitability Declines

Bitcoin mining became less profitable in July compared to June, according to a report by Jefferies. The investment bank cited a 6% drop in Bitcoin’s price, coupled with a stable network hashrate, as key factors contributing to the decline. The report noted that while U.S.-listed mining companies produced a larger share of Bitcoin in July, accounting for 21.1% of the total network, the profitability of mining operations remained under pressure, according to Coindesk.

Jefferies downgraded its price target for Marathon Digital, one of the leading Bitcoin miners, from $22 to $17, maintaining a hold rating on the stock. Marathon Digital, despite the market challenges, managed to increase its Bitcoin production by 17% in July, producing 692 coins and solidifying its position as the sector’s leader in installed hashrate.

The report also highlighted that August could pose even more difficulties for miners, as Bitcoin’s price has dropped an additional 5% and the network hashrate has begun to rise again. This increase in competition among miners is likely to further squeeze profitability. JPMorgan also observed that U.S.-listed miners reached a record share of the global hashrate in July, emphasizing the growing dominance of these companies despite the challenging economic environment.