Bitcoin Mining Profits Keep Shrinking Despite Lower Network Competition, JPMorgan Reports

Bitcoin miners are continuing to face declining profitability, even as competition on the network eases, according to a new report from JPMorgan.

The investment bank noted that while the Bitcoin network hashrate fell for a second consecutive month in December, miners’ revenues and gross profits continued to deteriorate, reaching record lows.

Bitcoin Hashrate Declines for Second Straight Month

JPMorgan analysts reported that the average monthly network hashrate — a key indicator of mining competition — dropped by 30 exahashes per second (EH/s) in December, representing a 3% month-over-month decline.

The network’s average hashrate stood at approximately 1,045 EH/s, marking the second straight monthly contraction and signaling reduced competitive pressure among miners.

Hashrate measures the total computational power securing the Bitcoin network and is widely used as a proxy for mining difficulty and competition.

Mining Revenue Hits Record Lows

Despite the easing competition, mining profitability continued to fall sharply.

According to JPMorgan’s estimates:

Daily block reward revenue per EH/s averaged $38,700 in December

This figure was down 7% from November and 32% lower year-over-year, marking the lowest level on record

Daily gross profit per EH/s also declined 9% month-over-month to roughly $17,100

These figures highlight the mounting pressure on miners’ margins.

Why Mining Margins Are Under Pressure

While the report did not specify a single cause, JPMorgan suggested several contributing factors:

Lower Bitcoin prices since October

The impact of the most recent Bitcoin halving, which reduced block subsidies

Rising energy costs, further squeezing operating margins

Together, these forces have offset the benefits of reduced network competition.

Public Bitcoin Miners Still Outperformed in 2025

Despite recent profitability challenges, publicly traded Bitcoin miners delivered strong equity performance in 2025.

JPMorgan noted that the combined market capitalization of the 14 U.S.-listed Bitcoin miners and data center operators it tracks rose to $48 billion by year-end, representing a 73% increase over the year.

Performance highlights included:

Hut 8 (HUT): Best performer in December, gaining 2%

CleanSpark (CLSK): Worst performer, falling 33%

Only two companies outperformed Bitcoin in December, but

Nine of the fourteen miners beat Bitcoin’s performance over the full year, led by IREN (IREN) and Cipher Mining (CIFR)

Outlook: Efficiency Is Now Critical

The data suggests that while mining competition is easing, profitability will remain under pressure unless Bitcoin prices recover or operational efficiencies improve. As block rewards continue to shrink post-halving, miners with low-cost energy access, scale, and optimized hardware are likely to be the long-term survivors.