Wall Street investment bank Jefferies: In September, Bitcoin Mining profit margins plunged by 7%, as mining companies face the dual threat of "big pump in Computing Power + falling coin prices."

Wall Street investment bank Jefferies released a latest report, pointing out that the Bitcoin mining profit margin in September dropped by more than 7% compared to August. At the same time, as the price of Bitcoin fell by about 2%, the overall network mining Computing Power increased by 9%, leading to the dilution of the Block Reward that can be allocated per unit of Computing Power. (Background: The “Secret of Bitcoin's Crazy Surge” research report: The speed of corporate procurement is four times that of mining output) (Background Supplement: How low is the success rate of independent miners in “The Lone Brave”? A complete analysis of Bitcoin mining) Wall Street investment bank Jefferies released the latest report on October 20, stating that the Bitcoin mining profit margin in September decreased by more than 7% compared to August. At the same time, as the Bitcoin price fell by about 2%, the overall network mining Computing Power increased by 9%, resulting in the dilution of the Block Reward that can be allocated per unit of Computing Power, exacerbating the “high cost, high competition” problem faced by mining companies. Profit was hit doubly: price pullback and surge in Computing Power According to the Jefferies report, the daily earnings of 1 EH/s on September dropped from $56,000 in August to $52,000, although still higher than $43,000 a year ago, the decline has raised market vigilance. The report further pointed out that the average network Computing Power surged to 1.44 EH/s in September, and the on-chain difficulty simultaneously increased from 132 T to 156.92 T, indicating that the speed of competition in the mining industry has far exceeded the growth pace of coin prices. The decline in mining returns is directly reflected in the profit margin. The report estimates that when the electricity cost remains at $0.05/kWh, the marginal profit margin of mainstream ASIC Mining Rigs has dropped from nearly 40% at the beginning of the year to about 28% in September. If the Bitcoin price cannot rebound quickly, some miners with higher cost structures may face the risk of shutting down. Competition and Pressure of North American Listed Mining Companies The report also pointed out that in September, major North American listed mining companies mined a total of 3,401 BTC, a decrease of 175 BTC compared to August, and their share in global Computing Power slightly dropped from 26% to 25%. Among them, Marathon Digital (MARA) ranked first by mining 736 Bitcoins, while CleanSpark (CLSK) faced a reduction in output. The report further pointed out that with the Block Reward halving in 2024, and daily on-chain transaction fee income dropping below $500,000, merely expanding Computing Power is no longer sufficient for mining companies to maintain their growth curve. Therefore, to preserve profits, leading mining companies are eliminating and replacing old equipment en masse and focusing on controlling energy costs. From “Mining” to “Data Mining”: Diversification is Key to Survival As the Block Reward gradually thins, many mining companies are turning to AI training and high-performance computing (HPC) as their second growth curve. Jefferies cited examples in the report where some mining companies convert their renewable energy into schedulable Computing Power supply or participate in grid adjustment programs, pausing mining during peak periods and selling electricity back to earn extra income. These strategies not only lower overall electricity costs but also increase cash flow and enhance operational resilience. Looking ahead, Jefferies believes that if the BTC price cannot break through the profit dilution effect brought by the new Computing Power in the next two years, the speed of consolidation in the mining industry will further accelerate. The report concludes that mining is no longer a simple Computing Power competition, but a comprehensive competition that includes electricity, hardware, capital efficiency, and business diversification. Only mining companies that can continuously reduce unit costs and successfully expand into high-value-added fields such as AI are expected to maintain their foothold in the industry. Related Reports Chinese court rules “overseas mining” commercial contracts invalid! Disrupting financial order and public interest Tether plans to engage in “real mining” by investing in the gold mining industry, currently holding $8.7 billion in gold reserves PTT posts for help: “Family bought virtual mining rigs”: Investing 100,000, is receiving 500 daily a scam? “Wall Street investment bank Jefferies: Bitcoin mining profit margin plummeted by 7% in September, mining companies face dual threats of 'surge in Computing Power + falling coin prices'” This article was first published on BlockTempo, the most influential blockchain news media.