Bitcoin Hashrate Hits All-Time High in October, JPMorgan Says

What to Know

• Bitcoin’s network hashrate reached a new all-time high in October, climbing to 1,082 EH/s.
• Mining profitability declined slightly as daily block reward revenue and gross profit dropped.
• U.S.-listed miners like Cipher Mining outperformed with significant gains, while some miners lagged behind.

The Bitcoin network achieved a record monthly average hashrate in October, reflecting a surge in computational power and increased competition among miners. According to a report from JPMorgan, the network’s monthly average hashrate rose 5% to 1,082 exahashes per second (EH/s), marking the highest level ever recorded.

The hashrate measures the total computational power used to process transactions on Bitcoin’s proof-of-work blockchain. Higher hashrates indicate more miners are participating, which increases network security but also raises mining difficulty. At the end of October, mining difficulty rose by 3% compared to September, and it stood 80% higher than pre-halving levels in April 2024.

Mining Economics Pressure Continues

Despite the record-breaking hashrate, mining profitability faced pressures for the third consecutive month. Analysts estimated that miners earned an average of $48,000 per EH/s in daily block reward revenue, down 3% from September. Daily block reward gross profit also declined by 4%, highlighting the narrowing margins miners face amid rising competition.

The combined market capitalization of 14 U.S.-listed mining companies tracked by JPMorgan grew by $14 billion, a 25% increase, reaching $70 billion in October. The boost was fueled by high-performance computing announcements and the mining sector’s growing interest in AI applications.

Among U.S.-listed miners, Cipher Mining (CIFR) emerged as a top performer, posting a 48% gain last month. In contrast, Cango (CANG) underperformed, recording a 5% decline, which made it the only company in the group to lag behind Bitcoin’s own 3.9% drop.

Why Hashrate Growth Matters

Rising hashrate signals a more secure network, as more computational power makes it increasingly difficult for bad actors to compromise the blockchain. However, higher hashrate also intensifies competition among miners, leading to reduced profitability unless Bitcoin prices increase or miners improve operational efficiency.

The April 2024 halving, which reduced the block reward by 50%, has further strained mining margins. Even with the high hashrate, miners must now manage costs effectively to remain profitable. This dynamic is reshaping the industry, encouraging consolidation and technological upgrades to high-efficiency mining rigs.

Top Mining Companies to Watch

The report highlighted that U.S.-listed mining companies have been attracting attention due to their innovation in computing hardware and potential adoption of AI solutions. Cipher Mining’s exceptional performance underscores how efficient operations and strategic investments can yield significant returns, even amid tightening margins. Meanwhile, Cango’s underperformance suggests that not all mining operations can maintain profitability under heightened competition.

Investors and market watchers are closely monitoring how mining companies adapt to the evolving environment, particularly with Bitcoin prices fluctuating and network difficulty continuing to rise. Companies that manage to reduce energy costs, implement advanced mining technology, or leverage alternative revenue streams could outperform their peers in the months ahead.

Outlook for the Bitcoin Mining Sector

The record-breaking hashrate demonstrates ongoing confidence in the Bitcoin network and the mining industry, despite temporary dips in profitability. Miners who can optimize efficiency and reduce costs are likely to benefit as the network continues to grow. Additionally, external factors such as regulatory developments, electricity pricing, and technological innovations will remain key drivers of mining performance.

As the sector evolves, analysts expect competition to remain fierce, keeping margins under pressure while encouraging innovation and investment in mining infrastructure. Bitcoin’s network security and decentralization are set to strengthen further as the hashrate climbs, supporting the long-term resilience of the blockchain ecosystem.

Q&A About Bitcoin Network Hashrate and Mining

What is Bitcoin network hashrate?

Bitcoin network hashrate refers to the total computational power used to mine and process transactions on the Bitcoin blockchain. Higher hashrates indicate increased network security and competition among miners.

Why did mining profitability fall in October?

Profitability decreased due to rising competition, a higher network difficulty, and slightly lower daily block reward revenue and gross profits for miners.

Which mining companies performed best last month?

Cipher Mining (CIFR) led with a 48% gain, benefiting from efficient operations and strategic investments, while Cango (CANG) underperformed with a 5% decline.

How does the hashrate affect Bitcoin network security?

A higher hashrate makes it more difficult for malicious actors to compromise the blockchain, enhancing the network’s security and stability.

What challenges do miners face with rising hashrate?

Rising hashrate increases competition, which can reduce profitability unless miners adopt more efficient technology or operational strategies.