November 2024 proved to be an exceptionally lucrative month for publicly listed Bitcoin miners in the United States. Capitalizing on Bitcoin’s meteoric rise to near $100,000 (peaking just shy of $99,000 before settling around $97,000 by month’s end), the sector experienced explosive growth. This rally, fueled in part by post-election optimism, propelled the collective market capitalization of 14 companies tracked by JPMorgan analyst Reginald L. Smith to a remarkable 52% month-over-month increase, reaching a staggering $36.2 billion. This growth significantly outpaced Bitcoin’s own 37% appreciation during the same period.
Bitdeer Leads the Charge, While Argo Trails Behind:
Smith pinpointed Bitdeer Technologies Group (BTDR) as the standout performer, boasting an incredible 83% surge in November. This exceptional performance was attributed to Bitdeer’s singular focus on Bitcoin mining and its substantial Bitcoin holdings (HODL reserves). In contrast, Argo Blockchain PLC (ARBK) underperformed, experiencing a 3% decline. This downturn was linked to the company’s exposure to high-performance computing, a sector less directly correlated to Bitcoin’s price movements. The performance disparity underscores a clear market preference for companies directly benefiting from Bitcoin’s price fluctuations, with those holding significant Bitcoin reserves significantly outperforming their peers.
Mining Revenue Soars Despite Halving Looms:
The analyst’s report highlighted a substantial increase in mining revenue driven by Bitcoin’s price surge. Daily block reward revenue saw a 24% month-over-month jump, averaging $52,000 per exahash per second (EH/s). Gross profit also experienced a significant boost, climbing by 64% to $26,100 per EH/s. However, Smith cautioned that these figures still lag behind pre-halving levels by 48% and 62% respectively. The upcoming Bitcoin halving in April 2024, which will reduce the block reward, presents a significant challenge for the industry, casting a shadow over future profitability.
Record High Valuations and Future Outlook:
Investor enthusiasm pushed miners’ valuations to unprecedented heights. By the end of November, the group’s valuation reached 31% of the nominal value of the immediate block reward opportunity and an impressive 62% of the four-year block reward opportunity. These figures far surpass historical averages of 18% and 37% respectively, indicating an exceptionally bullish market sentiment. Smith suggests that pure-play miners, particularly those with substantial HODL balances like Bitdeer, are best positioned to navigate the market’s future trajectory. Conversely, more diversified companies like Argo Blockchain might face greater volatility and uncertainty in the coming months. The upcoming halving and its effect on profitability will undoubtedly be a critical factor shaping the industry’s landscape in the near future. The continued success of Bitcoin will remain pivotal to the overall fortunes of these mining companies.
