Bitcoin Production is High, But Companies Still Face Imminent Price Cut
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The Bitcoin mining market saw a little drop last month when compared to the figures the previous months, according to recent data.
An analysis from investment bank Jefferies noted that miners’ margins were affected due to a drop in the price of Bitcoin. The impact led the institution to decide to reduce the target price for Marathon Digital Holdings by more than 20%.
Bitcoin’s Network Harshrate Is Still Up
The value of Bitcoin fell by more than 6% last month, but its network hashrate was still stable. The hashrate measures the Bitcoin mining’s computational power. Despite a surge in the production rate for companies listed in the US, these are affecting mining operations.
According to the report, the firms increased their combined output, jumping from 20.7% of total Bitcoin production in June to 21.1% in July. The surge in market share was a result of additional capacities the companies brought online rather than their actual network growth.
However, some companies performed well despite the slower output in mining. Marathon Digital Holdings did great as it added more production strength to lead the market. The major industry player mined 692 Bitcoins last month, showing a 17% surge from the previous month. The company is still maintaining its leadership position when it comes to the installed harshrate capacity.
Riot Platforms did well in the industry, as it raised its production capacity by 45 percent. Last month, it produced 370 Bitcoins, increasing its previous month’s production rate by 115 Bitcoins. Other companies did not do quite well in the market.
Argo Blockchain was only able to produce 48 Bitcoins in the whole of July, which is a 63% decline from its figures the previous month. The situation is even worsened because of the current price of Bitcoin, which shows that the actual amount the firm made has fallen. Bitcoin is presently 21% short of its historical highs.
The Companies Believe More Challenging Periods Are Ahead
Jefferies is anticipating more challenging periods for Bitcoin miners. According to the report, miners should be expecting a further 5% decline in BTC’s price this month. Profit margins could be squeezed tighter following a renewed surge in network hashrate.
Jefferies has also reduced its mining outlook for Marathon Digital in line with the current situation in the market. The bank has reduced the price expectation for the firm’s stock from $22 to $17. However, the hold rating still remains stable.
