JPMorgan: BTCMiner is in a cold winter, stepping into the AI computing business still faces challenges

With the decline in BTC price and the revenue reduction brought by the Halving event in April 2024, BTC miners are facing unprecedented operational pressure. Even though some miners try to compensate for losses through artificial intelligence (AI) related businesses, market concerns about data center demand still make it difficult for these enterprises to get out of the predicament.

The decline in BTC price exacerbates Miner operating pressure with the Halving effect

According to the latest research report provided by JPMorgan to Cointelegraph, as the price of BTC drops and the Halving event in April further reduces mining revenue, the stock prices of BTC miners are suffering severe impacts.

(Trade war smoke and regulatory tightening restrain Bitmain miners from entering the United States, putting local miners in crisis)

The report pointed out that the total market value of the mining companies tracked by JPMorgan Chase decreased by 22% in February, a decline closely related to the weak BTC price, leading to an economic deterioration in mining.

The relationship between BTC price and network hash rate

Several mining companies, including Riot Platforms (RIOT), Bitdeer (BTDR), Marathon Digital (MARA), and Core Scientific (CORZ), announced their Q4 2024 financial reports last month. Despite Core Scientific reporting better-than-expected revenue, almost all companies' stock prices still fell after the financial report was released.

Halving impact on Miner revenue

As is well known, Bitcoin undergoes a Halving every four years, reducing the block reward by 50%. The Halving event in April 2024 will decrease the mining reward from 6.25 BTC to 3.125 BTC.

JPMorgan's data shows:

Since Halving, the mining revenue and gross profit of the mining company have decreased by 46% and 57% respectively. In addition, the February BTC price crash further led to a 9% decrease in gross profit.

In addition, the uncertainty of the macroeconomy has also intensified market volatility. Since President Trump took office in January and announced a 25% tariff on Canada and Mexico, the market's concern about the trade war has deepened further.

(Cryptocurrency market collapse under trade war: BTC ultimately cannot escape the fate of risky assets)

Challenges still facing AI-related businesses

Miners are hoping for other businesses, such as renting high-performance computing (HPC) equipment to AI models, or selling specialized ASIC microchips, to compensate for the reduced mining revenue. However, JPMorgan warned that even mining companies benefiting from the AI sector are currently under pressure:

Operators with HPC businesses also felt the pressure after DeepSeek announced the capabilities of its AI model, and the market has doubts about the short-term outlook for data center demand.

In January, the Chinese AI company DeepSeek stated that the cost of its AI model is much lower than that of the US market leader ( such as OpenAI's ChatGPT), but the effect is equivalent, leading to a general decline in AI-related stocks.

(Facing the impact of DeepSeek open source! OpenAI updates Model Spec: Emphasizing customization and ideological freedom, releasing a public license version )

However, JPMorgan still points out that mining companies like Hut 8, which have a large amount of AI-related business, are still valued higher than their competitors.

With the continuous fluctuation of BTC prices and market uncertainty, it remains to be seen whether mining enterprises can reverse the decline by relying on new business models such as AI.

This article JPMorgan: BTCMiner is in a cold winter, and it is still difficult to break through the predicament by entering the AI computing business first appeared on Chain News ABMedia.