Wall Street Bitcoin Miners Profitability Surges amid December Rally

The crypto mining sector witnessed significant economic improvements in December, with mining profitability reaching its highest levels in seven months. The hashprice, a key metric for daily profitability of the publicly listed Wall Street Bitcoin Miners, increased by 5% since November's end.

After a seven-month low in November, crypto mining profitability surged in December due to a rally in major cryptocurrencies.

Bitcoin has climbed 40% since early November, reaching historic highs above $107,000, while altcoins, such as the BGB utility token, have soared by 120% this December.

The hashprice, a key metric for daily profitability of the publicly listed Wall Street Bitcoin Miners, has increased by 5% since November's end.

"We note miners earned about $57,300 in daily block reward revenue per EH/s over the first two weeks of December," wrote Reginald Smith and Charles Pearce, analysts at JPMorgan, in a Monday note to clients.

Bitcoin miners have significantly reduced their holdings, selling over 140,000 BTC (valued at $13.72 billion) in December. This has decreased their total holdings from 2.08 million to 1.95 million BTC. Despite this substantial sell-off, Bitcoin's price has remained resilient, experiencing only minor pullbacks.

So far in December, #Bitcoin miners have sold over 140,000 $BTC, totaling $13.72 billion! pic.twitter.com/1g3sCo6uJM

Moreover, eight Wall Street miners reported lower BTC production in November, as the rising mining difficulty levels posed challenges for miners.

For instance, as Bitcoin was also testing its all-time highs in November, eight Wall Street miners reported lower BTC production. Despite these miners continuously expanding their mining capacity, the increasing difficulty level makes it harder to boost output. The higher the “difficulty” metric, the more computing power is required to extract the same amount of cryptocurrency.

The primary driver behind the selling appears to be covering regular operational expenses, including electricity bills and other running costs. The selling has been steady rather than panic-driven, suggesting a calculated approach to maintaining operations.

Moreover, with Bitcoin reaching new all-time highs above $107,000, miners are likely capitalizing on favorable market conditions to secure profits. This timing allows them to maximize returns on their mined assets.

Not everyone is selling their Bitcoins, though. An increasing number of publicly listed Wall Street Bitcoin miners are choosing to issue bonds or other debt instruments to raise additional funds and build up their BTC reserves.

For example, on Monday, Riot Platform purchased an additional 667 BTC at an average price of $101,135. As a result, it now holds 17,429 BTC in its vault.

With the additional proceeds from Riot’s upsized $594 million, 0.75% coupon convertible bond issue, the Company has acquired 667 BTC at an average price of $101,135 per BTC. As a result, Riot has increased its holdings to 17,429 BTC, currently valued at $1.8 billion based on the… pic.twitter.com/t68Uy8nbHU

By comparison, El Salvador, the first country to make BTC its official legal tender, has accumulated just under 6,000 BTC.