Public Bitcoin Miners To Gain Large Share of Hashrate: JPMorgan

Analysts at JPMorgan, led by managing director Nikolaos Panigirtzoglou, have hinted at the possibility that publicly listed Bitcoin (BTC) miners will continue to gain a larger share of the network’s hashrate. However, this is tied to the conditions that they cut costs and sustain profitability. 

Vertical Integrations Offers Cheaper Electricity

Bitcoin miners have tried reducing their operational costs, including securing their source of electricity and developing proprietary mining chips. At the same time, hashrates are rising, and the price of Bitcoin fluctuates. These vertical integrations provide miners with an avenue to make more profit.

In February, Mara Holdings, which has been

advocating for a long-term Bitcoin strategy, secured a Texas-based wind farm. Bitdeer bought a gas-fired power plant project in Canada in the same spirit of acquisition. JPMorgan analysts acknowledged that these moves serve two purposes: to meet energy requirements and drive lower costs.

Bitdeer had inked a partnership deal with TSMC to develop more efficient bitcoin mining chips. This allows it to replace its older rigs and sell excess equipment in secondary markets.

Bitcoin Miners and the Preference for Vertical Integrations

In addition to vertical integrations, Bitcoin miners are also pursuing horizontal integrations with other sectors. 

Some, like Riot Platforms, diversify into artificial intelligence (AI) and high-performance computing (HPC) to generate additional revenue. Riot Platforms welcomed three new board members with expertise in AI, HPC, and data center management. 

Still, more focus remains on vertical integrations as miners prioritize cost control. Last year, the push toward vertical integration and alternative financing helped public miners expand their share of the bitcoin network. It is little or no wonder that these JPMorgan analysts are expecting the trend to continue this year.

Bitcoin Sees Price Slump

Meanwhile, Bitcoin was trading at $80,481.48, following a 2.86% dip. Due to this outlook, Bitcoin investors who bought at record highs earlier this year are now rushing to exit. On-chain analytics firm Glassnode noticed a wave of selling pressure from recent buyers and stated that it has triggered “intense loss realization.” 

If the trend continues, it could push Bitcoin’s price further down to as low as $70,000.

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