The Bitcoin logo is seen in the main hall during the Bitcoin 2024 conference at Music City Center in Nashville, Tennessee, on July 26, 2024.
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It’s been an extreme week Bitcoin Enthusiast.
On the bright side, the cryptocurrency is up 12% in the past seven days, with the network hashrate hitting an all-time high. Hash rate refers to the collective computing power of all miners in the Bitcoin network, and recent highs show an unprecedented number of online miners actively protecting the network.
Meanwhile, another key indicator this week showed that it is increasingly difficult to make money in the mining industry. Investment bank Jefferies wrote in a report that profits from cryptocurrency mining fell “significantly” in August. Jefferies said average daily revenue per exahash, or revenue per miner, fell 11.8% from the previous month.
As Bitcoin becomes more mature and even becomes a mainstream part of the economy, the days of making easy money seem to be a thing of the past. Institutional capital has poured in since the SEC approved a spot Bitcoin exchange-traded fund in January, and the Bitcoin network is more powerful than ever, made up of a vast network of decentralized miners, aided by a massive bank of machines Ensure transaction security.
But more and more people — and their powerful machines — are vying for smaller rewards.
In April, Bitcoin code automatically cut new issuance of the world’s largest cryptocurrency in half, an event that occurs roughly every four years to create scarcity. Historically, halvings have preceded a wave of bankruptcies among Bitcoin mining companies, where the revenue generated by these companies is suddenly and significantly reduced while maintaining the same operating costs.
Bitcoin miners are getting hammered by Wall Street.
marathon numbers will decline by nearly 30% by 2024, while Anti-riot platform Already down 53%. Meanwhile, the price of Bitcoin is up about 44% this year.
Jefferies said the share of new Bitcoin minted by North American listed mining companies decreased in August compared to July, falling to 19.9% of the total network. They are still investing money in equipment upgrades, which means efficiency is improving but economics are deteriorating.
Marathon CEO Fred Thiel told CNBC that due to the upgrade cycle, the machine has twice the hashing power of the previous model while using the same energy.
“There’s no need to add sites or power supplies, just upgrade the system,” Thiel said.
Despite the challenging economic situation, Riot CEO Jason Les remains optimistic about the future of Bitcoin. He said that “Bitcoin is the most stable currency in the world” and “low-cost mining is an effective way to obtain Bitcoin.”
Not all miners are feeling the pinch. company likes core scienceThe company, which emerged from bankruptcy in January, is looking for ways to use its vast infrastructure to power artificial intelligence and high-performance computing (HPC).
Last month, Core announced an expanded $6.7 billion deal with CoreWeave, an Nvidia-backed startup that provides the chipmaker with graphics processing units (GPUs) used to run AI models.
In a report this week, Bernstein ranked Core Scientific as the best-performing publicly traded Bitcoin miner, noting that among miners diversifying into artificial intelligence and HPC, Core is “the only one with Companies with leading companies that have substantial custody contracts.” GPU cloud provider. “
Since returning to the stock market, Core has more than doubled in value and now has a market capitalization of nearly $3 billion.
“Our facility was developed to be multi-purpose, not only for Bitcoin mining, but also for our current transition to high-performance computing,” Core CEO Adam Sullivan told CNBC.
Bernstein added that if Core executes the full 700 megawatts of capacity allocated to AI and HPC, the company would become the third-largest publicly traded data center company in the United States.
“It’s really about where the real opportunity set is over the next three years to capture a significant portion of the data center market,” Sullivan said. “Every existing large data center company has carved out a niche, and The niche that Bitcoin miners are carving out right now happens to be the largest niche the data center industry has ever seen.”
— CNBC’s Talia Kaplan and Jordan Smith contributed to this report.
watch: Core Scientific CEO Adam Sullivan explains why the company is embracing artificial intelligence
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