Bitcoin miners are entering one of their harshest operating environments in years, according to a new report from JPMorgan analysts Reginald Smith and Charles Pearce. Their research highlights a fourth consecutive month of declining profitability, pointing to a combination of rising network competition, falling bitcoin prices, and tightening financial conditions that are pressuring even the largest public mining firms.
Mining Revenues Slide as Rewards Drop 26%
JPMorgan’s data shows that daily gross profit from block rewards fell another 26% in November, extending a months-long downtrend. The drop reflects a difficult macro backdrop for miners: bitcoin’s price weakened steadily throughout the month, while competition on the network kept miner rewards under strain despite a slight easing in hashrate.
Although the network hashrate slipped by about 1% in November after reaching all-time highs in October, overall difficulty remained historically elevated. That kept miner earnings tight and intensified competition for diminishing rewards.
Hashprice Falls Below Critical Thresholds
One of the clearest signs of pressure is the sharp fall in hashprice, the revenue that miners earn per unit of computing power. Late November saw hashprice drop below $35 per hash, a level that pushed several miners dangerously close to their breakeven points.
This environment has intensified stress across the industry and raised concerns about sustainability heading into the new year.
Public Miners Lose Market Value as Investors React
The report notes that the combined market capitalization of fourteen publicly listed U.S. miners dropped by 16% in November, sinking to $59 billion. JPMorgan also revised its outlook for Riot Platforms, cutting its price target due to weaker bitcoin prices and the impact of share dilution.
With profitability tightening, miners have been forced to rethink strategy, and in many cases, their financial structure.
Pivot to AI and HPC Still Not Enough
To reduce dependence on bitcoin mining alone, some firms are accelerating plans to shift resources into artificial intelligence and high-performance computing. These emerging lines of business have been touted as potential long-term stabilizers, but JPMorgan’s analysis suggests the revenue from AI and HPC services remains too limited to meaningfully offset the downturn in mining income.
As a result, miners face shrinking cash flow just as their operational demands remain high.
Debt Levels Rise as Miners Seek Relief
The report highlights a noticeable increase in miner borrowing, extending a trend that began last quarter with widespread issuance of convertible bonds. By Q4, higher-cost debt instruments became more common across the sector, an indication that financial strain is deepening and access to cheap capital is fading.
With revenues weakening and leverage increasing, miners are entering a more fragile phase.
Industry Enters a “Sorting Phase”
JPMorgan analysts conclude that the Bitcoin mining sector is approaching a critical inflection point. Elevated difficulty, falling profitability, and rising debt are likely to trigger a “sorting phase,” where weaker or over-leveraged miners may be forced to consolidate, merge, or exit the market altogether.
Stronger miners with efficient operations and diversified revenue streams may ultimately benefit, but only after the industry works through a period of financial and competitive reshuffling.