Bitcoin miners struggle despite 130% BTC increase in 2024

Key Takeaways

Bitcoin went up more than 130% in 2024, but stocks of mining companies ended the year in the red.
Increased operating costs, increased mining difficulty, and block profits from the event halved the profitability of the miners.

Bitcoin rose more than 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 companies produced good returns, according to a 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 results.

In contrast, several mining companies were struggling. Argo Blockchain (ARB) and Greenidge (GREE) saw their stocks down 84% and 74%, respectively.

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

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

This cut miners' income significantly, with daily earnings falling to $42 million by December 22, down from more than $100 million in April, according to the report.

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

Operating costs also rose significantly, with the average cash cost to produce one Bitcoin reaching around $55,950 in Q3, up from $49,500 in Q2, an increase of 13%, according to Report on the financial results of the annual income of the company CoinShares.

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

Together, they raised more than $2.2 billion through stock offerings in 2024, including $1.25 billion in Q2 from nine US-listed companies and an additional $530 million in Q3.

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