Bitcoin miners are anticipating a surge in earnings, according to the latest report from H.C. Wainwright & Co. The third quarter of 2024 showed mixed results for miners due to various market uncertainties and the upcoming Bitcoin halving in April 2024.
During the third quarter, Bitcoin prices experienced volatility influenced by factors such as concerns about the U.S. economy, international tensions, and the upcoming presidential election. After dropping to as low as $49,100 in August, BTC prices rebounded following the Federal Reserve’s decision to cut interest rates in September, leading to a rally that pushed prices to around $63,250 by the end of the quarter.
One of the significant drivers of demand was the U.S.-based spot Bitcoin ETFs, which saw net inflows of $4.3 billion in Q3, up from $2.4 billion in Q2. A third of these inflows occurred in just eight days following the Fed’s rate cut. Analysts are closely watching the upcoming election on November 5, as they believe that a Trump victory could potentially drive BTC prices to new highs, while a win by Vice President Harris might result in a short-term price correction.
In Q3, public Bitcoin miners expanded their operations significantly by adding 35 exahashes per second to the global network hash rate, representing a 4.5% increase from the previous quarter. Despite this growth, miners faced challenges due to the impending Bitcoin halving in April 2024, which reduces the rewards miners receive by half, making it more difficult to profit from mining.
The Bitcoin halving is a key event that occurs every four years to control inflation and ensure a limited supply of Bitcoins in circulation. As a result, miners need to enhance efficiency or rely on higher Bitcoin prices to maintain profitability. Although miner revenues fell by 29% in Q3 to $2.6 billion, with the average price earned per terahash decreasing significantly, analysts see potential opportunities on the horizon.
The combined market capitalization of public BTC miners decreased by 7% in Q3, indicating a potential buying opportunity for investors, especially as the sector has already rebounded by 12% in the current quarter. As earnings season for miners kicks off, all eyes are on how companies will perform, especially with BTC reaching over $73,000 this week.
Overall, the Bitcoin mining sector is gearing up for potential growth and opportunities despite facing challenges in the past quarter. With the market showing signs of recovery and Bitcoin prices on the rise, miners are optimistic about what lies ahead in the coming months.
