H.C. Wainwright & Co. has issued a fresh update on the state of Bitcoin mining, revealing a mixed third quarter for miners who have been impacted by market uncertainties and the upcoming Bitcoin halving in April 2024.
According to the analysis shared with crypto.news, Bitcoin (BTC) prices experienced volatility throughout Q3 2024, influenced by concerns surrounding the U.S. economy, global tensions, and the upcoming presidential election.
After reaching a low point of $49,100 in August, BTC prices rebounded following the Federal Reserve’s decision to cut interest rates in September. This rate cut, the first in four years, sparked a rally and pushed BTC to around $63,250 by the end of the quarter.
One of the significant factors driving demand was the introduction of U.S.-based spot Bitcoin ETFs, which saw net inflows of $4.3 billion in Q3, up from $2.4 billion in Q2, as reported by the analysts. A third of these inflows occurred in just eight days following the rate cut by the Fed. Analysts anticipate that the upcoming election on November 5 will have a significant impact on BTC prices, with a potential Trump victory pushing BTC to new heights and a win by Vice President Harris possibly leading to a temporary price correction.
In terms of Bitcoin miner operations, public miners expanded their operations significantly in Q3, adding 35 exahashes per second to the global network hash rate, resulting in a 4.5% increase from the previous quarter. However, miners faced challenges due to the upcoming April 2024 Bitcoin halving. This event, which occurs every four years, cuts the reward that miners receive in half, making it more difficult to profit from mining.
For those unfamiliar, Bitcoin halving refers to the reduction in the number of new Bitcoins miners earn for adding new blocks to the blockchain. This is part of Bitcoin’s design to control inflation and ensure that there will never be more than 21 million Bitcoins in circulation. As a result, miners must either become more efficient or rely on higher Bitcoin prices to remain profitable.
Despite these challenges, miner revenues declined by 29% in Q3 to $2.6 billion, with the average price miners earned per terahash dropping significantly. However, analysts see potential opportunities ahead.
The combined market capitalization of public BTC miners decreased by 7%, indicating a possible buying opportunity for investors, especially considering that the sector has already rebounded by 12% in the current quarter, according to analysts.
With earnings season for miners commencing this week, all eyes will be on how companies perform, particularly as BTC surges over $73,000 this week.
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