- Bitcoin miners facing hardships due to reduced mining rewards, finds JP Morgan.
- JP Morgan expects Riot and Iren stock prices to climb in the coming months.
According to a recently published JP Morgan report, Bitcoin miners are struggling to keep up with the post-halving event as reduced rewards and increasing electricity costs eat through their revenues. The Bitcoin halving that occurred on April 20 cut mining rewards by half, reducing them from 6.25 BTC to 3.125 BTC.
Miners have no option but to increase the amount of bitcoin they generate to increase revenues. To ensure that, industry leaders like Marathon Digital, Riot Platforms, and CleanSpark are highly active in the mergers and acquisitions (M&A) scene. Cash-rich miners like them are scooping up other mining firms to boost the power they can harness and increase their hashrates. Others are striking deals with local governments to receive increased power at discounted rates.
The JP Morgan report studied five miners—all publicly listed in the US markets—including Marathon Digital, Riot Platforms, CleanSpark, Iren, and Cipher. These miners collectively mined 5,854 bitcoin in Q2 this year, a 28% decline from the previous quarter. Marathon led the bunch, mining 2056 bitcoin alone. CleanSpark followed, earning 27% of the bitcoin mined in the period. It also increased its market share after investing $231 million in capital expenditure during the quarter.
JP Morgan Feels Riot and Iren Stocks Are Undervalued
JP Morgan also mentioned that it prefers Iren and Riot and feels their stock prices are undervalued, letting investors know that this presents a buying opportunity. Riot’s performance lately dropped due to the obviously reduced rewards and other operational obstacles. However, the banking behemoth feels Riot is set to perform better in the coming months as it overcomes said obstacles. Furthermore, it stated how Iren witnessed declining stock prices because of heightened power costs incurred via hedging losses. Nevertheless, it expects the price to rise as Iren course corrects.
