Bitcoin Miners’ Earnings and Market Trends

Casual observers of Bitcoin miners’ Q4 earnings could be forgiven for thinking it’s been nothing but smooth sailing for the industry.

However, there’s no ignoring the fact that publicly traded Bitcoin miners lost $23 billion off their collective market capitalization last month, according to a recent JP Morgan report.

It’s not all that surprising, given the price of Bitcoin began February above $102,000 and then sank as low as $78,000 while markets were affected by President Donald Trump’s trade war talk.

Aside from hoping Bitcoin’s price increases, stock analysts spoke to Decrypt about keeping an eye on data center deals, energy costs, and how miners improve their existing fleets’ efficiency.

Hut 8’s Growth

At the start of the week, Hut 8 reported $162.4 million revenue for 2024—a 69% increase compared to 2023. Mike Colonnese, a managing director and senior crypto analyst at H.C. Wainwright, expressed optimism about Hut 8’s prospects.

> “We think Hut 8 is close to signing a major HPC/AI deal with a hyperscaler,” he noted. “The company would build and operate an HPC/AI data center for a client in a colocation model, generating long-term high-margin revenues.”

Hut 8 also reported a 30% decrease in energy costs, leading to an 8 point increase in gross margin per Bitcoin mined, comparing Q4 2024 to the previous year. This achievement is significant, especially following the Bitcoin network’s fourth halving event, which halved miners’ block rewards.

Colonnese anticipates that mining costs will increase in 2025, given that network difficulty will continue to rise alongside hash rate growth and lack of significant upgrades to popular mining rigs. However, he expects BTC price appreciation to outpace difficulty growth, suggesting miners may experience improved economics.

The Importance of Hashcost

Nishant Sharma, the founder of Blocksbridge Capital, emphasized the importance of monitoring miners’ overhead. He introduced the term hashcost, which measures miners’ fleet efficiency against operational expenses.

“This provides a clearer picture of how cost-effectively the company mines Bitcoin,” Sharma stated. He also highlighted that mining firms, like Hut 8, have diversified revenue streams by offering data center space to AI and HPC clients.

Core Scientific’s Developments

Others, such as Core Scientific, are striving to design their own ASIC chips. The ASIC, or application-specific integrated circuit, optimizes hardware specifically for crypto mining. In 2024, Core Scientific announced a partnership with Jack Dorsey’s Block Inc. to develop ASIC chips.

Denise Sterling, Core Scientific’s CFO, mentioned they do not plan to refresh their Bitcoin mining fleet until the new Block ASIC chips are ready in 2025.

Despite somewhat unimpressive mining performance, analysts noted that Core Scientific’s HPC segment is thriving, bolstered by a landmark deal with AI hyperscaler CoreWeave.

In related news, Bitdeer, another Bitcoin miner, is also venturing into manufacturing, introducing the SEALminer A2 rigs, which have captured an estimated 5% market share based on projected future hashrate growth.

> “This segment offers greater operational flexibility,” Shannon noted, indicating that using machines at cost reduces expenditures compared to market purchases.