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Bitcoin Miners Invest in the Future: Why Rising Hashrate Attracts Institutional Capital

Bitcoin’s hash rate — the total computing power supporting the Bitcoin network — reached a new historic level on January 3, exceeding 1,000 exahashes per second (EH/s), according to data from CoinWarz.

This is almost double the hash rate of the network from 12 months ago. According to CoinWarz, the Bitcoin hash rate was around 510 EH/s in January 2024. At the time of publication, Bitcoin’s hash rate had dropped to approximately 780 EH/s.

The increasing hash rate of the network indicates that Bitcoin miners are dedicating more computational resources to the blockchain, which enhances the security of the network. Miners continue to ramp up their production even after Bitcoin’s halving in April reduced mining rewards from 6.25 BTC to 3.125 BTC per block.

Overcoming Obstacles

In 2024, Bitcoin’s strong performance partially offset the negative effects of the halving, especially for mining companies with significant cash reserves, such as Riot Platforms and CleanSpark. Reserves in stablecoins worth $45 billion are preparing Bitcoin for a new rally. What is expected at the start of 2025?

Mining firms “acquired other miners with ready facilities to increase their hash rate in the short term and expand their energy capacity,” according to a research note from JPMorgan on December 10, shared with Cointelegraph. Miners have also prioritized accumulating BTC on their balance sheets. In December, JPMorgan raised target prices for four Bitcoin mining stocks to reflect the value of their energy assets and BTC holdings, according to JPMorgan.

JPMorgan highlighted the performance of MicroStrategy shares, a software company that has essentially transformed into a Bitcoin fund, as its shares were trading at approximately 2.4 times higher than the value of its Bitcoin holdings as of December 10.

Bitcoin miners, including Marathon, Riot, and CleanSpark, hold Bitcoin reserves worth approximately $4.4 billion, $1.7 billion, and $910 million, respectively, according to data from BitcoinTreasuries.net.

Institutional Inflows

The rising Bitcoin hash rate — and the corresponding improvement in network security — is particularly important as institutional investors inject capital into Bitcoin exchange-traded funds (ETFs) and other regulated cryptocurrency investment vehicles. In November, Bitcoin ETFs surpassed $100 billion in net assets for the first time, according to data from Bloomberg Intelligence.

Asset manager Sygnum expects this trend to accelerate in 2025 as large institutional investors, including sovereign wealth funds, endowment funds, and pension funds, will add Bitcoin to their portfolios.

“With improved regulatory clarity in the U.S. and the potential for Bitcoin to be recognized as a reserve asset by central banks, 2025 could mark a sharp acceleration in institutional participation in crypto assets,” said Martin Burger, Chief Client Officer at Sygnum, in a statement.

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