Bitcoin Miners with HPC Exposure Underperform in April, Says JPMorgan

In early April, bitcoin miners with HPC exposure significantly underperformed compared to pure play miners like MARA Holdings and CleanSpark. While the hash rate increased, bitcoin prices fell, impacting mining profitability and economics. The total market cap of U.S.-listed miners also diminished during this period.

In the first two weeks of April, bitcoin miners with high-performance computing (HPC) exposure, such as Bitdeer, TeraWulf, IREN, and Riot Platforms, notably underperformed. In contrast, pure play miners, particularly MARA Holdings and CleanSpark, showed better performance, outperforming bitcoin itself during this period.

The rise in network hashrate, coupled with a decrease in bitcoin price, exerted pressure on mining economics, according to JPMorgan’s analysis. For context, pure play operators recorded a stronger performance compared to those involved in HPC applications, which are increasingly associated with artificial intelligence.

In March, the situation was more favourable for U.S.-listed miners, with increased mining capacity and a successful month overall. However, the beginning of April lacked similar momentum, attributed to an expanding hashrate that outpaced growth in U.S. operator capacity, leading to competitive pressures and lower bitcoin prices.

Analysts at JPMorgan highlighted that U.S.-listed miners are currently trading at a 1.2 times multiple of their proportional share of the four-year block reward opportunity, a low mark in over two years. The daily block reward revenue for miners fell to approximately $41,500 per exahash per second (EH/s), reflecting a 12% decrease from March.

As of mid-April, the network hashrate averaged 900 EH/s, representing an increase of 85 EH/s month-to-date. The hashrate, indicative of total computational power used in mining, impacts competition levels and mining difficulty. Furthermore, the overall market capitalisation of 13 tracked U.S.-listed bitcoin miners decreased by 2% to $16.9 billion.

Will Canny, a dedicated market reporter with a background in financial services, is currently reporting on crypto at CoinDesk, and holds over $1,000 in SOL.