Last June, Bitcoin (BTC) mining experienced a slight decline in profitability compared to the previous month. The price of the world’s largest cryptocurrency fell by more than 6% during this period, while the network’s hashrate (a measure determining mining difficulty) remained stable. Investment bank Jefferies highlighted this issue in its latest research report published on Thursday.
Jefferies Warns the Sector and Lowers Marathon Digital’s Target Price
While the hashrate of the Bitcoin network is considered an indicator of competition in the mining sector, mining difficulty is similarly linked to hashrate. Accordingly, Jefferies lowered the target price for Marathon Digital Holdings (MARA) shares from $22 to $17 but maintained its “hold” recommendation for the shares. Marathon Digital’s shares fell by approximately 0.7% to around $15 in pre-market trading following the report’s release.
The report also noted that U.S.-listed mining companies achieved a larger share of Bitcoin production in July compared to June. These companies increased their share of the Bitcoin network’s total hashrate to 21.1%, up from 20.7% the previous month. According to Jefferies, August will be more challenging for miners, as the Bitcoin price fell by around 5% this month while the network’s hashrate began to rise again.
U.S. Bitcoin Miners Rapidly Increasing Market Share
Jefferies analysts Jonathan Petersen and Joe Dickstein explained the reason for the expanding market share of U.S. miners by stating, “Public mining companies brought new capacities online faster than the network’s hashrate growth.”
In this context, Marathon Digital produced a total of 692 BTC in July, a 17% increase from the previous month, making it the largest Bitcoin producer in the sector. It was also emphasized that the company’s installed hashrate capacity is the largest in the industry.
Wall Street giant JPMorgan also noted in a recent report that U.S. miners’ share of the global hashrate reached a record level in July. These trends in the mining sector highlight the increasing influence of U.S. companies in the global Bitcoin mining market. However, there are warnings that the coming months could be more challenging for the mining sector.
