H.C. Wainwright & Co. has released its latest update on Bitcoin mining, showing a mixed third quarter for miners affected by broader market uncertainties and the upcoming April 2024 Bitcoin halving.
Per the analyst note shared with crypto.news, Bitcoin (BTC) prices remained volatile throughout Q3 2024, influenced by concerns about the U.S. economy, international tensions, and the upcoming presidential election.
After dipping as low as $49,100 in August, BTC prices bounced back following the Federal Reserve’s decision to cut interest rates in September.
This rate cut marked the first reduction in four years and sparked a rally, pushing BTC to around $63,250 by the end of the quarter.
Spot Bitcoin ETFs
A significant demand driver was U.S.-based spot Bitcoin ETFs, which saw net inflows of $4.3 billion during Q3, up from $2.4 billion in Q2, according to the analysts.
A third of these inflows occurred in just eight days following the Fed’s rate cut. Analysts expect the upcoming election on November 5 to have a major impact on BTC prices.
They predict a Trump victory could push BTC to new highs, while a win by Vice President Harris might lead to a short-term price correction.
Bitcoin miner operations
Public Bitcoin miners expanded operations significantly in Q3, adding 35 exahashes per second to the global network hash rate—a measure of computing power used for mining—resulting in a 4.5% increase from the previous quarter.
Despite this expansion, miners faced challenges due to the April 2024 Bitcoin halving. This event occurs every four years and cuts the reward miners receive by half, making it harder to profit from mining.
For those unfamiliar, Bitcoin halving refers to reducing 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 there will never be more than 21 million Bitcoins in circulation.
As a result, miners must become more efficient or rely on higher Bitcoin prices to remain profitable.
Despite these hurdles, miner revenues fell 29% in Q3 to $2.6 billion, with the average price miners earned per terahash dropping significantly. However, analysts see opportunities ahead.
The combined market capitalization of public BTC miners declined by 7%, signaling a potential buying opportunity for investors, especially as the sector has already rebounded by 12% in the current quarter, per analysts.
With earnings season for miners kicking off this week, all eyes will be on how companies perform, particularly as BTC surges over $73,000 this week.