Bitcoin miners brace for earnings, analyst sees buying opportunity

HC Wainwright & Co. has released its latest update on Bitcoin mining; This update shows a mixed third quarter for miners affected by broader market uncertainties and the upcoming April 2024 Bitcoin halving.

According to the analyst note shared with Crypto.news, Bitcoin (BTC) prices remained volatile throughout the 3rd quarter of 2024, affected by concerns about the US economy, international tensions and the upcoming presidential elections.

BTC prices, which dropped to $49,100 in August, rebounded after the Federal Reserve’s decision to lower interest rates in September.

This rate cut was the first decline in four years and sparked a rally, pushing BTC to $63,250 by the end of the quarter.

Spot Bitcoin ETFs

U.S.-based spot Bitcoin ETFs, a key driver of demand, saw net inflows from $2.4 billion in Q2 to $4.3 billion in Q3, according to analysts.

One-third of these inflows occurred in just eight days following the Fed’s rate cut. Analysts expect the elections to be held on November 5 to have a major impact on BTC prices.

They predict that Trump’s victory could push BTC to new highs, while Vice President Harris’ win could lead to a short-term price correction.

Bitcoin miner transactions

Public Bitcoin miners expanded their operations significantly in the third quarter, adding 35 exahashes per second to the global network hashrate (a measure of computing power used for mining), a 4.5% increase from the previous quarter.

Despite this expansion, miners faced difficulties due to the Bitcoin halving in April 2024. This event occurs every four years and reduces the rewards miners receive by half, making it harder to make a profit from mining.

For those who don’t know, Bitcoin halving means reducing the number of new Bitcoins miners earn by adding new blocks to the blockchain. This is part of Bitcoin’s design to control inflation and ensure that there are never more than 21 million Bitcoins in circulation.

As a result, miners must become more efficient or rely on higher Bitcoin prices to remain profitable.

Despite these hurdles, miner revenues fell 29% to $2.6 billion in the third quarter, and the average price miners earned per terahash dropped significantly. But analysts see opportunities ahead.

According to analysts, the total market capitalization of publicly traded BTC miners fell by 7 percent, signaling a potential buying opportunity for investors; especially since the sector has already recovered by 12 percent this quarter.

With earnings season kicking off for miners this week, all eyes will be on how companies will perform, especially with BTC surging above $73,000 this week.