Bitcoin Mining Profitability Surges in December: What the Data Reveals

Bitcoin mining profitability rebounded for the second consecutive month in December, marking a significant recovery even as the broader market remained volatile. According to JPMorgan’s latest analysis, this resurgence reflects a crucial dynamic in the mining sector where cryptocurrency price appreciation is outpacing the growth in network computational power. The trajectory matters significantly for miners operating on thin margins, as profitability conditions directly influence their capacity to expand operations or maintain existing infrastructure.

Bitcoin Mining Profitability Gains Momentum

JPMorgan’s research report highlighted that miners’ daily revenue and gross profit reached their highest levels since April 2024, driven primarily by Bitcoin’s sustained price strength relative to network hashrate expansion. The data underscores a fundamental principle in mining economics: when asset prices rise faster than the computing power securing the network grows, individual miners capture greater value per unit of computational effort.

Mining profitability increased as the world’s largest cryptocurrency continued its upward trajectory, creating favorable conditions for those invested in mining hardware and operations. The sequential improvement from November to December demonstrates that the sector has begun stabilizing after months of compressed margins and challenging profitability metrics.

Revenue Surge Masks Deeper Earnings Challenges

JPMorgan calculated that Bitcoin miners earned an average of $57,100 per exahash per second in daily block reward revenue during December, representing a 10% month-over-month increase. This recovery sounds promising on the surface, but the underlying story reveals significant structural headwinds. Analysts Reginald Smith and Charles Pearce emphasize that daily revenue and gross profit per exahash per second remain 43% and 52% below pre-halving levels respectively.

The Bitcoin halving event in April 2024 cut block rewards in half, fundamentally altering the mining economics landscape. To reach pre-halving profitability levels, miners require either substantially higher Bitcoin prices or dramatic improvements in mining efficiency and hardware productivity. The December recovery, while genuine, operates within constraints that haven’t fully resolved despite months of market adaptation.

Hashrate Acceleration and Rising Mining Difficulty

Network hashrate expanded by 6% in December to an average of 779 exahashes per second, indicating continued investment in mining infrastructure despite profitability pressures. Over the full year 2024, hashrate surged 54%, though this represented a deceleration from 2023’s explosive 103% growth rate. Mining difficulty rose 7% month-over-month and now stands 27% higher than pre-halving levels, creating a compounding pressure on individual mining operations.

These metrics reveal an arms race dynamic: as more miners deploy hardware to capture profits, difficulty adjusts upward, requiring constant reinvestment to maintain competitive positioning. The gap between current and pre-halving difficulty levels indicates that mining operations haven’t yet returned to their previous profitability baseline despite months of elevated Bitcoin prices and favorable market conditions.

Mining Stocks Face Contrasting Fortunes

The publicly listed Bitcoin mining stocks tracked by JPMorgan declined dramatically in December, with the 14-stock cohort losing 23% of combined market capitalization to reach $28 billion. This sharp pullback contrasts sharply with November’s 52% rally, reflecting the sector’s extreme volatility and sensitivity to both market sentiment and operational metrics.

TeraWulf (WULF) emerged as a notable outperformer, gaining 136% across 2024 compared to Bitcoin’s approximately 120% appreciation. However, most mining operators underperformed the underlying asset, suggesting that equity investors have priced in significant structural challenges and margin compression that Bitcoin’s price recovery alone cannot fully offset.

Technical Rebound Lacks Fundamental Support

Bitcoin recently rebounded to approximately $69,000 in what market participants characterized as a sharp short squeeze rather than a sustained trend reversal. The rally sparked movement in correlated assets including altcoins such as Ethereum, Solana, Dogecoin, and Cardano, along with cryptocurrency-exposed equities from Coinbase and related firms.

According to market analysis from LMAX Group and FalconX, the rebound appears driven primarily by bearish positioning and thin liquidity conditions rather than fundamental catalysts. Some fund managers rotated into volatile altcoins and options strategies, chasing momentum rather than establishing conviction-based positions. Key resistance levels around $72,000 and $78,000 must demonstrate sustained technical breaks to signal a meaningful structural uptrend rather than a tactical bounce.

At current price levels near $68,310 with 24-hour momentum showing +4.46%, Bitcoin remains caught between competing forces: mining profitability recovery motivating continued network investment, but mining stock weakness suggesting equity investors discount these gains as temporary given the elevated difficulty environment and incomplete recovery to post-halving profitability targets.