As a seasoned crypto investor with a decade of experience under my belt, I’ve seen the market ebb and flow like the tides of the digital ocean. The year 2024 has been an intriguing one, to say the least. Bitcoin, the granddaddy of all cryptos, has posted an impressive 113% return this year, making heads turn and wallets fatter. However, it’s a different story for most miners’ stocks.
2024 saw Bitcoin (BTC) surge by an impressive 113%, as of December 24th. However, many companies specializing in Bitcoin mining have failed to profit from this cryptocurrency boom, ending the year with losses instead.
Based on information from the Hashrate Index and Google Finance, most publicly traded mining companies are projected to close 2024 with losses, some experiencing drops as significant as 84%.
Out of the 25 miners in the Index, just seven firms have been profitable for investors this year. As I’m typing this, Bitdeer (BTDR) has shot up by 167%, Cipher (CIFR) has increased by 33%, Hut 8 (HUT) has skyrocketed by 91%, Iris Energy (IREN) is on an upward trend of 72%, Northern Data (NB2) has risen by 58%, Core Scientific (CORZQ) is moving up by 327%, and TeraWulf (WULF) is at a growth of 169%.
Conversely, some cryptocurrency stocks such as Argo Blockchain (ARB), Sphere 3D (ANY), MARA Holdings (MARA), Hive (HIVE), Greenidge (GREE), Bitfarms (BITF), and BitFufu (FUFU) experienced significant drops. Specifically, ARB dipped by 84%, ANY slipped by 69%, MARA fell by 12%, HIVE declined by 29%, GREE dropped by 74%, BITF slid by 44%, and FUFU lost 18%.
Miners’ hurdles in 2024
2024 saw Bitcoin mining firms adapting to the challenges posed by decreased rewards, rising expenses, and the pursuit of alternative income sources in order to keep their businesses running smoothly.
Since the beginning of the network, miners have accumulated more than $71 billion in earnings. However, approximately every four years, the reward for mining new blocks is cut in half during a process called halving. The most recent halving occurred in April, lowering mining rewards from 6.25 Bitcoins to 3.125 Bitcoins.
Based on figures provided by Blockchain.com, the earnings of miners on December 22nd were approximately $42 million. However, these earnings peaked above $100 million back in April.
Currently, the challenge of generating a new block on the Bitcoin blockchain has nearly doubled compared to last year. This increase puts additional strain on the growing expenses associated with Bitcoin mining. The average difficulty at present is approximately 108.52, which represents a significant rise from 72.01 experienced a year ago, equating to a 50.71% increase over the past year.
Costs for Bitcoin mining significantly climbed up as well, owing to heightened operational expenses. For an example, BitFuFu disclosed a staggering 168% jump in Bitcoin mining costs, amounting to $51,887 per BTC, and a 62.5% boost in mining capacity.
Many publicly-traded mining firms sought additional funding by tapping into the capital market.
Furthermore, certain businesses decided to expand their activities in the year 2024. Notably, Core Scientific, a company primarily known for Bitcoin mining, ventured into the artificial intelligence (AI) industry by teaming up with CoreWeave to accommodate Nvidia GPUs. This move was strategic, aiming to leverage the increasing need for powerful AI computing resources. The collaboration is projected to potentially bring in approximately $8.7 billion in revenue over the next 12 years for Core Scientific.
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2024-12-24 21:29