After a tumultuous few months in 2024, during which Bitcoin reached record levels, miners are again demonstrating strong performance. According to data from JPMorgan, Bitcoin mining profitability increased in December 2024 and continued to rise into early 2025.
But what is driving this growth, and how are global economic and technological trends influencing Bitcoin?
Bitcoin mining profitability was 10% higher at the end of 2024 than in November, reaching levels unseen since April of the same year.
This growth is attributed to Bitcoin's price rising faster than the network's hash rate, thereby boosting miners' daily revenues. JPMorgan data indicates that miners earned approximately $57,100 per exahash per second in December, underscoring the benefits of Bitcoin's price increase.
It is worth noting, however, that despite the increase in profits, such indicators still fall short of the level recorded before the halving. The bank's analysts noted a 43% decrease in gross profit compared to pre-halving indicators, as well as slower growth in the hash rate. In 2024, the network hash rate grew by 6%, which is a significant slowdown compared to 2023, when it increased by 54%.
The rise in profitability has not come without challenges. Mining difficulty continued to increase by 7% in December, making Bitcoin extraction increasingly resource-intensive. For mining companies, this poses a significant challenge as higher difficulty and equipment costs threaten the sustainability of profitability.
Additionally, the market valuation of publicly traded mining companies in the U.S. dropped by 23%, likely due to growing competition, increasing mining difficulty, and overall volatility in cryptocurrency markets. However, TeraWulf stood out with a remarkable 136% growth in 2024, defying the negative trends affecting the sector.
Miners are not the only ones shaping Bitcoin's market dynamics. In 2024, Bitcoin maintained its appeal to institutional investors, playing a crucial role in its market recovery. The approval of Bitcoin ETFs in the U.S. marked a significant turning point, offering institutional investors an easier way to invest in the digital asset.
These ETFs greatly improved Bitcoin's liquidity, attracted new capital inflows and stabilized the market during periods of high volatility. Institutional adoption, coupled with an increase in institutional investments, enhanced market resilience and drew attention from major players.
One of the most significant factors driving Bitcoin's growth in recent months has been the 2024 halving event, which drastically reduced mining rewards and led to a supply shortage in the market. This built-in mechanism continues to enhance Bitcoin's value, making it attractive to long-term investors seeking assets with inflation protection.
The geopolitical landscape has also played a critical role. Speculation surrounding Bitcoin's potential inclusion in the U.S. national reserves and the growing interest in its adoption by other countries have driven price increases and strengthened Bitcoin's position in the global economy.
Bitcoin remains one of the most volatile assets in financial markets. In 2024, its price reached record highs of $108,000, only to retreat to $91,000 by year's end. This pullback reminds us of Bitcoin's unpredictable behavior, even amid positive external factors.
Predictions for 2025 remain uncertain. Some experts, such as Arthur Hayes from BitMEX, forecast that the cryptocurrency market will peak in mid-March 2025, followed by a significant correction. Hayes also suggests that Bitcoin could continue to rise in the medium term, driven by ongoing reductions in seller-side liquidity.
A sharp decline in seller-side liquidity has emerged as a key market factor. Increasing numbers of Bitcoin participants are adopting a HODLing strategy, significantly limiting the available supply of coins in the market.
According to recent analytics, more than 70% of all BTC is now held in wallets that have not moved their funds for over a year. This metric is at a record high and reflects growing confidence among long-term investors in Bitcoin's future. This trend is particularly pronounced during macroeconomic uncertainty, as cryptocurrency is increasingly perceived as "digital gold."
This trend has a dual impact on miners. Reduced sales of mined coins create a supply shortage that supports BTC prices. On the other hand, miners who actively accumulate Bitcoin essentially become "liquidity custodians," influencing market dynamics.
The network hash rate also continues to set new records, indicating heightened competition among miners. Despite the high mining difficulty, many players choose to hold their coins, anticipating higher prices rather than locking in profits immediately.
This reduction in selling pressure is often viewed as a strong bullish signal. Historically, extended holding periods of large BTC volumes have often preceded significant price surges. If this trend persists, miners and investors employing an accumulation strategy may benefit when the market enters a new growth phase.
Despite inherent risks, Bitcoin solidifies its position as a long-term asset, offering inflation protection and reflecting shifts in global financial markets. In 2025, if current trends persist, Bitcoin has a strong chance of further development and achieving new price levels despite inevitable short-term fluctuations.
*La presente analisi del mercato ha un carattere esclusivamente informativo e non rappresenta una guida per l`effettuazione di una transazione.
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