Publicly traded Bitcoin (BTC) mining firms reached a market cap of well over $43 billion.
At the time of writing the cumulative market cap of those companies stands at $43.12 billion, according to Farside Investors data. The value of the considered firms more than doubled in seven months as Bitcoin’s price kept rallying.
The details
The biggest challenge for Bitcoin mining firms is revenue, especially considering that the Bitcoin block reward was cut by 50% in April. This will happen again, in a pre-programmed process known as halving, with the one taking place last April being the fourth.
Following the last halving, 450 BTC are mined per day and the transaction fees paid to miners are currently worth under one million per day. This forces miners to either diversify their revenue streams or produce Bitcoin at a cheaper cost than its value — fortunately BTC’s price sensibly increased to about $97,000 at the time of writing.
Despite the price hike mining at a profit remains a challenge that is also becoming harder. The mining difficulty, which determines how much computing power (and consequently time and electricity) is required to create a new block, is expected to increase by a further 3% over the next few days.
Blockchain.com shows that at the time of writing Bitcoin’s mining difficulty stands at its current all-time high value above 100 trillion. For comparison, in early December 2023, it stood at under 68 trillion.
Still, investment in Bitcoin mining is still going strong. Blockchain.com data shows that the network’s total hash rate stands at over 726 million terahash per second. Back in late October, this value grew by over 10% in a single day, showing strong interest in mining Bitcoin at the time.
Renewed interest in anything Bitcoin-related is not particularly surprising given the current circumstances. Bitcoin — and the broader crypto market — have been rallying almost non-stop ever since the election of Republican candidate Donald Trump in the United States presidential elections.
Following the election of the pro-crypto candidate who promised the creation of a strategic national Bitcoin fund, a Brazilian Congressman proposed for the nation to create its own Bitcoin reserve. The market itself also took notice, with U.S. Bitcoin spot exchange-traded fund (ETF) net assets under management recently breaking $100 billion for the first time.
