Growth is good, however, in the world of Bitcoin mining, growth can also be bad. As the overall Bitcoin mining network capacity rises the competition for each Bitcoin mined also increases, making it harder to “earn” each Bitcoin.
Public companies have a distinctive quarter-to-quarter cadence driven by SEC financial reporting requirements and the associated “earnings calls”. However, public Bitcoin mining companies are special, they operate on a more frequent cadence, releasing monthly production and operations updates.
This week Marathon, Riot, Terawulf, and Core Scientific released their March updates. The underlying theme for most was growth in mining capacity, as measured by energized Exahash Per Second (EH/s) computing capacity, also known as hashrate. February to March EH/s increased by 21%, 7%, and 27% for Marathon, Riot, and Terawulf, respectively. Correspondingly, over the past month, these three companies’ stock prices have risen by an average of 41%. Core Scientific, which is in the midst of a Chapter 11 reorganization, had its capacity dip by 4% but remains the largest Bitcoin miner as measured by EH/s capacity.
Growth is good, however, in the world of Bitcoin mining, growth can also be bad. As the overall Bitcoin mining network capacity rises the competition for each Bitcoin mined also increases, making it harder to “earn” each Bitcoin. Last month the global Bitcoin network hashrate rose by 9%, somewhat offsetting the gains enjoyed by each company’s growth.