The Bitcoin mining industry experienced another challenging month in October, according to a recent JP Morgan report. Despite a significant increase in hashrate, which measures the computing power used to mine cryptocurrencies, miners’ revenue and profits continued their downward trend.
This is the fourth consecutive month in which a decline in daily Bitcoin mining revenue and gross profitsaccording to the bank. The daily gross profit of the block reward reached its lowest level in recent records, indicating increasing pressure on the profitability of this activity.
According to the financial institution, miners obtained an average of $41,800 per exahash per second (EH/s) hashrate in daily income from block rewards, 1% less than in September when it stood at $42,000, as was reported by CriptoNoticias.
The increase in hashrate also means that the mining difficulty, which automatically adjusts to maintain an average of 10 minutes per block, has also reached a new all-time high in October. This means that the Miners must invest more computational resources to find new blocks and get rewards.
On October 22, this newspaper reported that this processing power indicator reached the record figure of 734 EH/s, which translates into greater security for the Bitcoin network. However, at the time of publishing this article, the value has already risen to 744 EH/s, according to Braiins metrics.
“The network hashrate, in the seven-day moving average at the end of the month, was higher at 748 EH/s, 18% higher than at the end of September and 62% higher year-on-year,” said Reginald Smith and Charles Pearce in the report presented by the bank.
JPMorgan analysts also they pointed out that the market capitalization of major publicly traded mining companies increased in October, driven by companies with exposure to high-performance computing. However, the financial performance of these companies remains closely linked to the price of Bitcoin and general cryptocurrency market conditions.
CriptoNoticias reported that, given the decrease in profitability in bitcoin mining, miners are seeing artificial intelligence as another way of doing business. Increased competition has reduced profit margins in miningwhich has forced many players in the sector to look for new sources of income.
The specialized hardware used in mining turns out to be highly compatible with the intensive computational tasks required for training artificial intelligence models.
