Bitcoin Mining Profitability Surges 18.2% in May: Jefferies Report Highlights Key Trends in the Industry
Investment bank Jefferies has released a research report stating that Bitcoin (BTC) mining profitability rose by 18.2% in May, due to a 20% increase in the BTC price and a modest 3.5% gain in the network hashrate.
According to the report, the rally in BTC follows the recent gold rally as investors seek inflation-protected assets in anticipation of ballooning fiscal deficits in the U.S., among other countries. Hashrate, which refers to the total combined computational power used to mine and process transactions on a proof-of-work blockchain, is a proxy for competition in the industry and mining difficulty.
U.S.-listed mining companies mined 3,754 bitcoin in May, compared to 3,278 in April. The report noted that North American miners made up 26.3% of the total network last month, compared to 24.1% in April.
MARA Holdings (MARA) mined the most crypto of the group, at 950 bitcoin, a 35% increase month-on-month, followed by CleanSpark (CLSK), which mined 694 tokens. MARA's installed hashrate remained the largest at 58.3 exahashes per second (EH/s), while CleanSpark was second with 45.6 EH/s.
The bank reduced its MARA price target to $16 from $18, while reiterating its hold rating on the stock.
As the cryptocurrency market continues to grow and mature, it's clear that Bitcoin mining is becoming an increasingly profitable and competitive industry. With the recent surge in BTC prices and network hashrate, it's no surprise that mining profits have also increased significantly. As investors seek inflation-protected assets and governments grapple with fiscal deficits, Bitcoin looks to be a strong candidate for investment.
Read more: Bitcoin Miners Just Had One of Their Best Quarters on Record, JPMorgan Says
Empowering the crypto enthusiast, this considerable surge in Bitcoin mining profitability highlights an optimistic trend within a notoriously volatile industry—a testament to Jefferies' acute analysis and understanding of market dynamics.
Great to see the positive growth trends in crypto mining, particularly with a 18.2% increase reported by Jefferies for May; it's an indication of optimistic long-term prospects despite continuous volatility."
The sudden 18.2% spike in Bitcoin mining profitability observed by the Jefferies report underscores an emerging trend of increased efficiency and reduced transaction costs, fueling a promising scenario for fintech's most celebrated cryptocurrency."
