Key Points
- Bitcoin mining had a mixed Q3 2024 due to market uncertainties and the upcoming Bitcoin halving in April 2024.
- US-based spot Bitcoin ETFs and Bitcoin miners’ operations significantly influenced Bitcoin prices.
H.C. Wainwright & Co. has published its most recent report on Bitcoin mining, revealing a varied Q3 for miners due to wider market uncertainties and the forthcoming Bitcoin halving in April 2024.
Bitcoin Price Volatility
According to the analysis note, Bitcoin (BTC) prices were unstable throughout Q3 2024, affected by worries about the U.S. economy, global tensions, and the imminent presidential election.
After dropping to as low as $49,100 in August, BTC prices rebounded following the Federal Reserve’s decision to lower interest rates in September.
This rate cut, the first in four years, triggered a rally, driving BTC to approximately $63,250 by the end of the quarter.
Spot Bitcoin ETFs and Miner Operations
A major demand driver was U.S.-based spot Bitcoin ETFs, which saw net inflows of $4.3 billion during Q3, a rise from $2.4 billion in Q2, as per the analysts.
A third of these inflows occurred in just eight days following the Fed’s rate cut. Analysts anticipate the upcoming election on November 5 to significantly impact BTC prices.
They forecast that a Trump victory could propel BTC to new highs, while a win by Vice President Harris might result in a short-term price correction.
Public Bitcoin miners significantly expanded operations in Q3, contributing 35 exahashes per second to the global network hash rate—a measure of computing power used for mining—resulting in a 4.5% increase from the previous quarter.
Despite this expansion, miners encountered challenges due to the April 2024 Bitcoin halving. This event, which happens every four years, halves the reward miners receive, making it more difficult to profit from mining.
For those unfamiliar, Bitcoin halving refers to the reduction in the number of new Bitcoins miners earn for adding new blocks to the blockchain. This is part of Bitcoin’s design to control inflation and ensure there will never be more than 21 million Bitcoins in circulation.
As a result, miners must become more efficient or depend on higher Bitcoin prices to stay profitable.
Despite these obstacles, miner revenues fell 29% in Q3 to $2.6 billion, with the average price miners earned per terahash dropping significantly. However, analysts see opportunities ahead.
The combined market capitalization of public BTC miners declined by 7%, signaling a potential buying opportunity for investors, especially as the sector has already rebounded by 12% in the current quarter, according to analysts.
With earnings season for miners starting this week, all eyes will be on how companies perform, especially as BTC surges over $73,000 this week.