Bitcoin Mining Profitability Rises 2% in July -BTC Price Outpaces Hashrate Growth

Bitcoin Mining Profitability

Key Highlights

• Bitcoin mining profitability surged 2% in July, with miners benefiting from soaring BTC, which rose to a new high.

• Bitcoin miners from the U.S., such as IREN and Mara, mined the most despite rising difficulty, which is putting pressure on miners.

Bitcoin mining profitability rose 2% in July, as BTC prices gained 7% while the network hashrate climbed 5%. U.S.-listed miners like IREN and MARA led the sector.

Bitcoin Mining Profitability Surges

Bitcoin recorded significant gains in July, reaching a new all-time high multiple times. With the rising prices, key players within the blockchain enjoyed massive rewards and benefits in equal measures. One of the biggest beneficiaries of the price surge is Bitcoin mining companies. According to a research report by investment bank Jefferies, bitcoin mining profitability saw a modest but important improvement in July. The sector benefited from a 7% increase in Bitcoin's price, which outpaced the 5% growth in network hashrate, resulting in a 2% gain in mining profitability.

U.S.-Listed Miners Increase Market Share

According to the report, U.S.-listed mining firms produced 3,622 BTC in July, compared with 3,379 BTC in June. This growth pushed their global network share to 26%, up from 25% the previous month. Notably, the report highlighted that IREN (IREN) mined the most bitcoin, generating 728 BTC, while MARA Holdings (MARA) followed closely with 703 BTC.

While IREN mined the most tokens, Jefferies noted that MARA's energized hashrate remained the largest in the sector at 58.9 exahashes per second (EH/s) at the end of July. CleanSpark (CLSK) ranked second with 50 EH/s, positioning both firms as dominant players in Bitcoin's increasingly competitive mining industry.

The hashrate, a measure of the total computational power securing Bitcoin's proof-of-work network, has become a key benchmark for miner competitiveness. When the hashrate rises, miners face higher difficulty and more challenging conditions for mining profitability. Rising difficulty significantly affects profitability, and firms earn less from mining activities when there's a higher mining difficulty.

In addition, the report indicated an uptick in revenue per unit of hashrate. A hypothetical 1 EH/s mining fleet would have earned about $57,000 daily in July, compared with $56,000 in June and roughly $50,000 a year earlier. These market players earned more than in the previous month and years.

BTC price uptick and mining competition

It's important to note that BTC prices, whether rising or declining, significantly impact miners and their competitiveness. Continued positive Bitcoin price momentum benefits firms like Galaxy Digital (GLXY), which operate across digital asset sectors.

While Bitcoin mining profitability has moderately surged, these miners remain under pressure as the network hashrate rises, intensifying competition for block rewards. With U.S.-listed miners steadily expanding their share of the global network, hash rate growth and Bitcoin price performance will remain defining factors for the sector's prospects in the months ahead.

Based on the recent profitability of Bitcoin mining, if Bitcoin continues to rise, profitability will also increase. Equally, if the BTC price drops and the market retraces, we will also see a drop in mining profitability.