Bitcoin miners with high-performance computing activities realized lower returns than Bitcoin itself for the third consecutive month.
This was reported by JPMorgan analysts Reginald Smith and Charles Pearce in a recent market analysis of crypto mining trends. During April, this segment of miners again lagged behind the wider cryptocurrency market in performance.
Miners such as TeraWulf (WULF), Hut 8 (HUT), Riot Platforms (RIOT), and Iris Energy (IREN) shifted strategically to high-performance computing services. The firms anticipated profiting from increasing demand for related computing in artificial intelligence.
The strategy did not yield improved performance in the last three months of trade. Their price movements lagged behind those of Bitcoin in those months.
April was tough for mining firms as competition in networks grew across the board. The total Bitcoin network hashrate grew by 6% versus March and set a new monthly average of 872 exahashes every second.
The spike in computing power was an indication of increased competition between miners to confirm blocks and earn rewards. This was also the second-largest month-to-month increase in network hashrate ever reported.
Public Bitcoin miners navigate pressure & competition
However, following this higher network difficulty, mining profitability declined for mining companies. The revenue of daily block rewards dropped by 6% compared to last month, and this put additional financial stress on Bitcoin miners.
The rewards declined even as there was an increase in the total market capitalization of U.S.-listed mining stocks.
Thirteen publicly traded mining firms tracked by JPMorgan saw their aggregate market capitalization increase by 12% in April.
Their value was boosted by improved performance by some individual stocks, with Greenidge Generation (GREE) making an impressive 46% increase month-on-month. Greenidge was an outlier in a month where the majority of HPC miners were still struggling.
The miners experience increasing pressure to manage cryptocurrency exposure and emerging business models against an intensifying competitive environment.
As some businesses have expanded to AI-specific computing as well as other areas, immediate results remain subdued relative to direct Bitcoin returns.
In the meantime, there remain traditional mining firms that still consider a growth strategy against increasing technical and market issues.
