Bitcoin Miners' Market Cap Drops 2% in April Amid Rising Competition

In the first two weeks of April, the performance of bitcoin mining stocks was varied, with pure play operators outperforming those with exposure to high-performance computing (HPC). According to a research report, MARA Holdings and CleanSpark were the only miners that outperformed the largest cryptocurrency during this period. In contrast, miners with exposure to HPC, such as Bitdeer, TeraWulf, IREN, and Riot Platforms, underperformed.

March had been a favorable month for U.S.-listed miners, as they added 15 exahashes per second of capacity and mined more tokens. However, the first two weeks of April did not continue this positive trend. The network hashrate growth outpaced the expansion of U.S. operators, and the average bitcoin price declined, which pressured mining economics. Analysts Reginald Smith and Charles Pearce noted that the network hashrate has risen 85 EH/s month-to-date to an average of 900 EH/s, indicating increased competition and mining difficulty.

The total market cap of the 13 U.S.-listed bitcoin miners tracked by the bank fell 2% to $16.9 billion in April. Miners earned about $41,500 in daily block reward revenue per EH/s in the first two weeks of the month, a 12% decline from March. The bank estimated that U.S.-listed miners are currently trading around 1.2 times their proportional share of the four-year block reward opportunity, which is the lowest level in more than 2 years.

This underperformance of miners with HPC exposure can be attributed to the declining average bitcoin price and the increased network hashrate, which has made mining more competitive and less profitable. The decline in daily block reward revenue per EH/s further supports this analysis. The underperformance of these miners highlights the challenges faced by the industry in the current market conditions.