Bitcoin Miners Continue to Face Dwindling Profits Despite Lower Competition, JPMorgan Says

Why It Matters

Profitability pressure threatens miners’ cash flow, while rising equity valuations suggest investors still see long‑term upside in the sector.

Key Takeaways

• Hashrate fell 3% month‑over‑month in December
• Block‑reward revenue per EH/s down 32% YoY
• Daily gross profit per EH/s dropped 9%
• U.S. miners' market cap rose 73% in 2025
• Only two miners outperformed Bitcoin in December

Pulse Analysis

The recent dip in Bitcoin’s network hashrate signals a temporary easing of competition among miners, but it does not translate into higher margins. A lower hashrate typically reduces the difficulty of mining new blocks, yet miners are still grappling with a steep decline in block‑reward revenue per exahash, now at a record low. This paradox highlights that external factors—most notably Bitcoin’s price trajectory and the lingering effects of the 2024 halving—are exerting a stronger influence on profitability than raw computational power alone.

Profit margins are being squeezed from multiple angles. Since October, Bitcoin’s price has slipped, eroding the revenue base for miners already contending with elevated electricity costs and the capital‑intensive nature of modern ASIC equipment. The JPMorgan analysis shows a 7% month‑over‑month drop in daily block‑reward revenue and a 9% decline in gross profit per EH/s, underscoring the vulnerability of mining operations to market volatility. Energy price spikes further exacerbate the cost structure, making it harder for miners to achieve breakeven without significant price rebounds or efficiency gains.

Despite the operational headwinds, the equity side of the mining industry tells a different story. The combined market capitalisation of the 14 U.S.–listed miners and data‑center operators surged 73% in 2025, reflecting investor confidence in the sector’s long‑term growth potential. Companies like Hut 8 posted modest gains, while others such as CleanSpark lagged, illustrating divergent performance within the peer group. As nine of the fourteen firms outperformed Bitcoin over the past year, capital markets appear to reward firms that can navigate the cyclical nature of mining profitability, suggesting that strategic positioning and diversified revenue streams will be key differentiators moving forward.