The cryptocurrency mining sector has experienced a surge in profitability this December, reaching its highest levels in seven months. Wall Street’s publicly traded Bitcoin miners are reaping the rewards of this rally, with mining revenues spiking as key metrics indicate a robust resurgence in the sector.
As of early December, Bitcoin miners saw daily block reward revenue climb to approximately $57,300 per exahash per second (EH/s)—a seven-month high. However, this figure still sits about 40% below pre-halving levels, highlighting both the progress and challenges miners face. Despite this, the industry is showing solid momentum, driven by Bitcoin’s impressive 40% price increase since November, which saw it briefly surpass the $107,000 mark. Altcoins have also been benefiting, with some, like the BGB utility token, experiencing a remarkable 120% surge this month alone.
“We observed miners earning an average of $57,300 daily per EH/s over the first two weeks of December,” said analysts Reginald Smith and Charles Pearce from JPMorgan. Their analysis points to the strengthening of the U.S.-based miners, with their combined hashrate rising 94% year-to-date, now accounting for 29% of the global Bitcoin network.
The Dynamics of Miner Behavior
Despite the growing revenues, the overall market capitalization of Wall Street’s Bitcoin mining companies took a hit, declining by approximately $1.5 billion in the first two weeks of December. Miners are also reducing their holdings of Bitcoin, selling over 140,000 BTC (worth roughly $13.72 billion) throughout the month. This reduced their combined reserves from 2.08 million BTC to 1.95 million BTC. Despite these sell-offs, Bitcoin’s price has demonstrated remarkable resilience, with only minor pullbacks despite the large-scale transactions.
This consistent selling can largely be attributed to operational costs. Mining, which requires significant amounts of electricity and resources, comes with hefty ongoing expenses. By selling off some of their holdings, miners can ensure their continued operation without impacting their long-term profitability. But it’s not all about selling—some miners are taking a more strategic approach.
Rather than selling all their mined BTC, some miners are opting to issue debt instruments or convertible bonds to raise capital. For instance, Riot Platforms, one of the largest publicly listed Bitcoin miners, raised $594 million via an upsized 0.75% coupon convertible bond. With these proceeds, Riot purchased 667 BTC at an average price of $101,135, bringing its total Bitcoin holdings to 17,429 BTC—currently valued at over $1.8 billion.
In contrast, El Salvador, the first nation to adopt Bitcoin as legal tender, has accumulated just under 6,000 BTC in comparison, showcasing the difference in scale between sovereign nations and private mining entities.
The Ongoing Challenge: Increasing Mining Difficulty
As Bitcoin’s price climbs, so does the mining difficulty. The difficulty adjustment metric, which reflects how challenging it is to mine Bitcoin, has risen to 106 trillion in December, up from 85 trillion in April. This increase in difficulty means miners need more computational power to extract the same amount of Bitcoin, making it harder to boost production even as prices rise.
For example, despite the high prices in November—when Bitcoin was also testing all-time highs—eight major Wall Street miners reported lower BTC production. Their capacity expansion efforts have been stymied by the increasing difficulty level, which requires more energy and resources for the same output.
Why Are Bitcoin Miners Selling in December?
The primary reason behind this December sell-off is straightforward: covering operational expenses. With mining being energy-intensive, covering electricity bills and other overhead costs is a constant challenge for miners, especially as difficulty rises. At the same time, with Bitcoin’s price soaring, miners can lock in profits by liquidating some of their holdings.
The timing of these sales is also strategic—mining companies are capitalizing on Bitcoin’s market highs to optimize their returns, positioning themselves for even larger long-term profits as the market matures.
As Bitcoin miners continue to scale their operations and diversify their funding strategies, the industry remains in a delicate balance between expansion and profit-taking. The surge in mining profitability this December underscores the power of a robust cryptocurrency market, yet the challenges of mining difficulty and operational costs are a reminder of the complex ecosystem that miners must navigate.
