Bitcoin miners struggle despite BTC’s 130% surge in 2024

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Key Takeaways

Bitcoin surged over 130% in 2024, but most mining companies’ stocks ended the year in the red.
Rising operational costs, increased mining difficulty, and reduced block rewards from the halving event impacted miners’ profitability.

Bitcoin surged over 130% in 2024, rising from the year’s opening price of $42,300 on January 1 to $98,600 as of December 24, 2024.

However, only 7 of 25 publicly listed Bitcoin mining firms delivered positive returns, according to a report by Cointelegraph.

Core Scientific (CORZQ) led the gainers with a 327% increase, followed by TeraWulf (WULF) at 169%, Bitdeer (BTDR) at 167%, and Hut 8 (HUT) at 91%.

Cipher (CIFR), Iris Energy (IREN), and Northern Data (NB2) also posted positive returns.

In contrast, several mining firms struggled significantly. Argo Blockchain (ARB) and Greenidge (GREE) saw their stocks plummet by 84% and 74%, respectively.

MARA Holdings (MARA) and Bitfarms (BITF) also faced notable declines, recording losses of 12% and 44%.

The challenges miners faced in 2024 were largely driven by the April halving event, which reduced block rewards from 6.25 BTC to 3.125 BTC.

This cut miners’ revenues substantially, with daily earnings dropping to $42 million by December 22, down from over $100 million in April, according to the report.

Mining difficulty rose by 50.7% in 2024, from 72.01 to 108.52, reflecting increased competition and higher computational power needed to mine new blocks.

Operational costs also rose substantially, with the average cash cost to produce one Bitcoin reaching approximately $55,950 in Q3, up from $49,500 in Q2, a 13% increase, according to a CoinShares report.

To mitigate these challenges, many mining companies turned to capital markets for financial relief.

Collectively, they raised over $2.2 billion through stock offerings in 2024, including $1.25 billion in Q2 from nine US-listed firms and an additional $530 million in Q3.

At the same time, companies like MARA and Hut 8 took steps to strengthen their balance sheets by accumulating Bitcoin reserves.