Rising network competition, weaker hashprice and stretched rig payback periods are pressuring miners even as publicly traded stocks rally on new analyst upgrades.
Bitcoin miners are confronting a sharper profitability squeeze as the network’s record-high hashrate meets a notable decline in Bitcoin’s market price. A new industry report shows that revenue conditions have deteriorated at the fastest pace in months, leaving several operators near breakeven and prolonging equipment payback periods. Despite the pressure on underlying economics, publicly listed miners have surged on the back of renewed analyst confidence and major cloud-computing partnerships.
Mining Economics Face Fresh Strain
The network’s hashrate climbed to 1.16 ZH/s in October, the highest level ever recorded. At the same time, Bitcoin’s price drifted toward $81,000 entering November, compressing mining rewards. As a result, hashprice fell below $35 per hash, sliding under the median $45/PH/s revenue level reported by listed mining firms.
Industry analysts note that payback periods for new mining rigs have now stretched beyond 1,200 days, placing additional strain on companies relying on rapid equipment turnover.
“When revenue drops while competition keeps climbing, miners face margin compression faster than any other segment in the digital asset economy,” one market researcher explained.
Rising financing costs have added to the pressure, following a wave of near-zero-coupon convertible bond issuances in recent quarters.
AI and HPC Pivot Not Yet Offsetting Declines
Miners have accelerated their move into AI hosting and high-performance computing (HPC) to diversify income. But the report warns that HPC revenues remain too small to counter the sharp decline in Bitcoin mining profits.
The downturn stands in contrast to a relatively steady third quarter, when hashprice averaged about $55/PH/s, supported by Bitcoin trading near $110,000.
Mining Stocks Rally on Analyst Upgrades
Despite weakening fundamentals, the top ten publicly traded miners saw broad gains, with CleanSpark, Cipher Mining, and IREN posting strong double-digit increases. The jump followed new research signaling long-term opportunity in the sector.
JPMorgan upgraded price targets for several miners, arguing that long-duration HPC and cloud-service agreements have begun transforming the revenue outlook. Cipher, whose shares had fallen roughly 45% from recent highs, was highlighted as “well-positioned” for additional HPC deals.
IREN also attracted attention after signing a five-year, $9.7 billion GPU cloud agreement giving Microsoft access to advanced Nvidia GB300 GPUs hosted in its facilities.
As Bitcoin’s price softens and network competition continues to climb, mining margins are under their stiffest pressure yet. While alternative revenue streams show promise, they remain too small to offset current declines. Still, investor sentiment toward listed miners has strengthened, supported by analyst upgrades and demand for high-performance compute — even as core mining economics tighten.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.