Investment Decisions: Bitcoin versus Bitcoin Mining Stocks - Where Should You Invest Today?
In the ever-evolving world of cryptocurrency, the Bitcoin ecosystem continues to show resilience amid historic milestones and rising miner activity. The Hashrate Index's weekly report for 9-15 September highlights a stable hashrate and difficulty for Bitcoin, indicating a steady network.
Despite the reduced number of coins earned post-halving, rising Bitcoin prices have helped offset this decline, preventing a drastic decrease in dollar-denominated revenue. Major mining players have largely held back on new deployments, allowing smaller operators to emerge as the main growth drivers.
Bitdeer, HIVE, and Cipher have expanded their capacity by 40%, 28%, and 18% respectively, contributing to the network's growth. Miners collected approximately 3,344 BTC in block rewards over the week, totaling roughly $382 million. However, the hashprice has slipped below $55 per PH/s, indicating tighter margins for miners.
The trends indicate that Bitcoin is continuing to unfold in the zetahash era, a significant milestone as the 14-day moving average hashrate surpassed 1 ZH/s for the first time in history. The network's mining difficulty is projected to climb by 4.1% to nearly 140 trillion, marking the first epoch with an average hashrate surpassing the zetahash milestone.
Transaction fees for Bitcoin dipped during the same period, while hashprice saw a modest increase. Fees contributed 29 BTC (~$3.3 million) to the overall revenue, accounting for less than 0.8% of block rewards, further reducing the income for miners.
The Coinglass's Bitcoin Daily Miner Revenue chart shows a significant drop in miner revenue after the April 2021 Bitcoin halving. Despite these challenges, Bitcoin mining stocks have outperformed Bitcoin in September. CIFR, WULF, IREN, BITF, and HIVE have seen rises of 124%, 95%, 86%, 38%, and 32% respectively, while Bitcoin fell by 3.2%.
Miners are facing economic challenges beyond energy costs and price volatility. Soaring mining difficulty reaching record highs increases computational power requirements and operational expenses, potentially leading to centralization as large firms dominate and smaller miners struggle to compete. Regulatory uncertainties and geopolitical factors like US protectionism and industrial re-shoring increase risks and costs for miners.
Despite these challenges, strong network fundamentals and rising scarcity metrics suggest that Bitcoin mining and broader market dynamics remain robust. Miner flows to exchanges like Binance have raised short-term selling concerns, but many operators are holding or transacting OTC, helping stabilize the market. The Bitcoin network officially entered the zetahash era, a testament to its continued growth and resilience.
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