Key Points
- The cryptocurrency rose 12%, and network hash rates hit a record high.
- Profitability declined by 11.8% in August, squeezing revenues for miners.
- Bitcoin’s halving event has reduced miner revenues, pushing some companies to upgrade equipment.
- Core Scientific has diversified into AI and HPC, boosting its stock and market cap.
This past week was full of highs and lows for bitcoin enthusiasts. On the upside, the cryptocurrency surged 12%, and the network’s hash rate—a measure of the total computing power of miners—reached an all-time high. This milestone indicates that more miners are securing the Bitcoin network than ever.
However, profitability in the mining industry is on the decline. According to a report from Jefferies, crypto mining was 11.8% less profitable in August than the previous month. This trend points to the growing competition among miners, each vying for smaller rewards as more powerful machines come online. The halving event in April, which automatically cuts bitcoin issuance by half every four years, has further squeezed revenues for mining firms.
The impact on publicly traded mining companies has been severe. Marathon Digital’s stock is down 30% in 2024, and Riot Platforms has seen a 53% drop despite Bitcoin’s price rising by 44% this year. Still, some firms are finding ways to remain competitive. Marathon CEO Fred Thiel noted that upgrading mining equipment has significantly boosted efficiency without increasing energy consumption.
Not all miners are struggling. Core Scientific, which emerged from bankruptcy in January, has pivoted to diversify its operations. The company recently secured a $6.7 billion deal with CoreWeave, an Nvidia-backed startup, to provide GPUs for artificial intelligence and high-performance computing (HPC). This shift has led to Core’s stock doubling in value, giving the company a market cap of nearly $3 billion.
Core Scientific CEO Adam Sullivan emphasized their facilities were designed for both bitcoin mining and HPC, highlighting the firm’s potential to become a major player in the U.S. data center industry. If The company fully taps into its 700-megawatt capacity, it could become the third-largest data center company in the country.
