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Bitcoin soared more than 130% in 2024, but most mining company stocks ended the year in the red. Rising operating costs, increasing mining difficulty, and decreasing block rewards due to halving events have affected miners’ profitability.
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Bitcoin soared more than 130% in 2024, rising from an opening price of $42,300 on January 1st to $98,600 as of December 24th, 2024.
However, according to a report by Cointelegraph, only seven out of 25 publicly traded Bitcoin mining companies have posted positive profits.
Core Scientific (CORZQ) led the way with gains of 327%, followed by Terrawolf (WULF) with 169%, BitDeer (BTDR) with 167% and Hut8 (HUT) with 91%.
Cipher (CIFR), Iris Energy (IREN), and Northern Data (NB2) also posted positive returns.
In contrast, some mining companies have struggled significantly. Shares of Argo Blockchain (ARB) and Greenwich (GREE) plunged 84% and 74%, respectively.
MARA Holdings (MARA) and BitFarms (BITF) also faced notable declines, posting losses of 12% and 44%.
The challenges faced by miners in 2024 were primarily caused by the April halving event, where the block reward decreased from 6.25 BTC to 3.125 BTC.
This has led to a significant drop in miners’ revenue, with daily revenue dropping to $42 million by December 22, from more than $100 million in April, the report said.
Mining difficulty increased by 50.7% in 2024, from 72.01 to 108.52, reflecting increased competition and the increased computational power required to mine new blocks.
Operating costs have also increased significantly, with the average cash cost to generate one Bitcoin rising from $49,500 in the second quarter to approximately $55,950 in the third quarter, a 13% increase, according to a CoinShares report. It is said that the number has increased.
To alleviate these challenges, many mining companies have turned to the capital markets for financial relief.
The company raised a total of more than $2.2 billion through initial public offerings in 2024, including $1.25 billion from nine U.S.-listed companies in the second quarter and another $530 million in the third quarter. are.
At the same time, companies such as MARA and Hut 8 have taken steps to strengthen their balance sheets by accumulating Bitcoin reserves.
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