Bitcoin Miners' Market Cap Surges to Record Highs, Fueled by AI Pivot
The combined market capitalization of U.S.-listed Bitcoin miners has reached unprecedented levels, exceeding $50 billion for the first time in September, according to a report by JPMorgan. This surge is largely attributed to a strategic shift among these companies towards high-performance computing (HPC) to support the rapidly expanding artificial intelligence (AI) sector.
Market Cap Growth and Key Drivers
The combined market cap of the 14 mining stocks tracked by JPMorgan rose by 43% month-on-month to $56 billion in September. This impressive growth was spurred by several key announcements, including Cipher Mining's (CIFR) HPC colocation deal with Fluidstack and IREN's (IREN) expansion of its Cloud Services business. Several other miners also saw substantial gains, including Applied Digital (APLD), TeraWulf (WULF), Hut 8 (HUT), and Bitfarms (BITF).
Hashrate Increase and Profitability
The Bitcoin hashrate also experienced a significant rise, with the monthly average network hashrate increasing by approximately 82 EH/s (+9%) month-on-month, reaching an average of 1,031 EH/s in September. However, this surge in hashrate led to a decline in mining profitability for the second consecutive month. JPMorgan analysts estimated that miners earned an average of $49,700 per EH/s in daily block reward revenue in September, representing a 10% decrease from August. Daily block reward gross profit also fell by 17% from the previous month.
Individual Miner Performance
While most miners saw significant gains, individual performance varied. Bitfarms (BITF) outperformed the group with a remarkable 110% gain, while Cango (CANG) underperformed with an 11% decline. Notably, twelve of the fourteen miners in JPMorgan's coverage outperformed Bitcoin itself in September, highlighting the strength of the mining sector despite the challenges in profitability.
The AI Pivot and Future Implications
The pivot to AI is transforming the Bitcoin mining industry, repositioning miners as key players in digital infrastructure. Companies are leveraging their vast computational resources to meet the growing demand for HPC, potentially leading to more stable revenue streams and attracting further investment. This transition indicates a maturation of the crypto industry, blurring the lines between cryptocurrency and artificial intelligence sectors.
| Metric | Value | Change |
|---|---|---|
| Combined Market Cap (September) | $56 Billion | +43% MoM |
| Bitcoin Hashrate (September) | 1,031 EH/s | +9% MoM |
| Daily Block Reward Revenue | $49,700 per EH/s | -10% MoM |
