Bitcoin Miners Shine in November as Market Rallies to New Heights
November delivered a standout performance for U.S.-listed Bitcoin miners, driven by Bitcoin's remarkable climb to unprecedented levels. The cryptocurrency surged to $99,000 before settling at $97,000 by month-end, buoyed by a post-election rally, according to JPMorgan analyst Reginald L. Smith.
This bullish momentum propelled miners' market capitalization to new heights. The collective value of 14 Bitcoin mining companies tracked by JPMorgan soared by 52% month-over-month, reaching $36.2 billion, significantly outpacing Bitcoin's 37% gain.
Leaders and Laggards: Bitdeer Stands Out
Bitdeer Technologies Group emerged as the month’s star, skyrocketing by 83% due to its exclusive focus on Bitcoin mining and substantial cryptocurrency holdings. Conversely, Argo Blockchain PLC underperformed, slipping 3% amid investor concerns about its high-performance computing exposure.
Smith emphasized the outperformance of miners with significant Bitcoin reserves, as the market rewarded those closely aligned with the cryptocurrency's meteoric rise. Bitcoin's price surge also boosted mining profitability, with daily block rewards increasing 24% to an average of $52,000 per exahash per second (EH/s) and gross profits climbing 64% to $26,100 per EH/s.
Despite these gains, current figures remain below pre-halving levels by 48% and 62%, respectively, reflecting challenges from the April 2024 Bitcoin halving.
Valuations Reach Unprecedented Levels
Investor optimism pushed miners' valuations to all-time highs. By the end of November, these companies were trading at 31% of the nominal value of the proved block reward opportunity and 62% of the four-year block reward opportunity—well above historical averages of 18% and 37%.
Smith predicts that pure-play miners with robust HODL balances, such as Bitdeer, are well-positioned to capitalize on the bullish trend. However, diversified players like Argo Blockchain may face more uncertainty.
As Bitcoin continues its upward trajectory, the mining sector's success underscores the importance of strategic focus and significant Bitcoin holdings in navigating the evolving crypto landscape.