Bitcoin Mining Profitability Reaches Post-Halving Peak: Is Now the Time to Invest?

The Bitcoin mining sector is navigating a pivotal inflection point in 2025, marked by a post-halving recovery in profitability, rising operational challenges, and divergent stock performance among key players. JPMorgan's July 2025 analysis reveals that daily block reward revenue for miners reached $57,400 per exahash (EH/s), the highest level since the April 2024 halving. This 4% monthly increase suggests a partial rebound in miner earnings, yet revenues remain 43% below pre-halving levels. Investors must now weigh whether this resurgence signals a sustainable recovery or a temporary reprieve in a sector grappling with structural headwinds.

The Post-Halving Profitability Paradox

The halving event in April 2024 slashed block rewards by 50%, reducing miner income overnight. While Bitcoin's price surge to $122,838 in July 2025 has offset some of this loss, the sector's profitability remains fragile. JPMorgan notes that the average cost of production per Bitcoin now stands at $37,856, with energy expenses accounting for 80% of operational costs. This highlights a critical vulnerability: miners with access to low-cost energy (e.g., Texas, Oman) are outperforming peers, while those reliant on volatile grids face margin compression.

The network hashrate, a proxy for mining competition, rose to 899 EH/s by July 2025, a 48% increase from pre-halving levels. While this reflects growing industry participation, it also signals a race to the bottom in terms of profitability. Miners must now invest in cutting-edge ASICs (e.g., Bitmain S21s, MicroBT M66S+) to maintain efficiency, with the average hash rate efficiency improving to 34W/T. However, these advancements come at a cost, as older hardware becomes uneconomical.

Stock Performance: Divergence Amid Uncertainty

Miner stock performance in Q2 2025 reveals stark contrasts in operational resilience. Phoenix Group PLC (ADX: PHX) emerged as a standout, with a 110% stock price surge from April to August 2025. The company's pivot to AI infrastructure and a 14% reduction in energy costs underscore its strategic adaptability. Meanwhile, Riot Platforms (NASDAQ: RIOT) reported record net income of $219.5 million in Q2 2025 but faced skepticism over non-recurring credits inflating earnings.

CleanSpark (CLSK) and Core Scientific (CORZ) offer further cautionary tales. CleanSpark's $1.13 billion Bitcoin treasury and $687.8 million in working capital position it as a long-term survivor, while Core Scientific's 21% stock decline reflects underperformance in a competitive landscape. These divergent outcomes highlight the importance of balance sheet strength and diversification in mitigating post-halving risks.

Hash Rate Growth: A Double-Edged Sword

Bitcoin's network hashrate grew by 51.82% year-to-date in 2025, driven by U.S.-based operations. However, this growth is now constrained by AI and high-performance computing (HPC) firms outbidding miners for energy capacity. GoMining Institutional reports that AI companies have secured long-term energy deals previously held by miners, forcing firms like Galaxy Digital and CoreWeave to pivot to hybrid revenue models.

Seasonal factors further complicate the outlook. Unlike the China-dominated era (2013–2020), where summer brought hash rate growth due to hydroelectric availability, the U.S.-led era now sees summer months marked by higher energy costs and reduced mining output. This shift underscores the sector's evolving vulnerability to macroeconomic and regulatory shifts, such as the U.S. Treasury's strategic Bitcoin reserve and rising ASIC tariffs.

Investment Implications: Balancing Risks and Opportunities

For long-term investors, the Bitcoin mining sector presents a mix of risk and reward. Key considerations include:
1. Operational Efficiency: Miners with access to low-cost, renewable energy (e.g., flared gas utilization) and advanced ASICs are better positioned to weather rising difficulty adjustments.
2. Diversification: Companies like Core Scientific, which transitioned into AI/HPC, demonstrate how non-Bitcoin revenue streams can stabilize earnings.
3. Balance Sheet Strength: Firms with robust Bitcoin treasuries (e.g., CleanSpark's $1.13 billion) and low debt (e.g., Phoenix Group's nearly debt-free profile) offer greater resilience during market corrections.

However, risks remain. The 9% monthly increase in mining difficulty to 899 EH/s by July 2025 pressures margins, while on-chain data from CryptoQuant indicates elevated selling pressure from whales and miners. Additionally, regulatory uncertainty—such as potential energy subsidies or tariffs on mining hardware—could disrupt the current recovery trajectory.

Conclusion: A Calculated Bet on Resilience

Bitcoin mining's post-halving recovery is far from linear. While July 2025 profitability marks a technical peak, the sector's sustainability hinges on its ability to innovate and adapt. Investors should focus on miners with:
- Low-cost energy infrastructure
- Diversified revenue models
- Strong liquidity and Bitcoin treasuries

Those willing to tolerate short-term volatility may find value in firms like Phoenix Group or CleanSpark, but caution is warranted. As JPMorgan notes, the industry's long-term success will depend on balancing technological efficiency with financial prudence—a challenge that will define the next chapter of Bitcoin mining.