Bitcoin Miners Navigating Favorable Conditions as Network Hashrate Falls in Early 2026

The cryptocurrency mining sector has entered 2026 with renewed momentum, as a combination of modest bitcoin price increases and declining network hashrate is reshaping the fundamental economics of mining operations. JPMorgan’s latest analysis reveals that U.S.-listed miners have captured an additional $13 billion in market valuation during the first two weeks of January, bringing their combined worth to approximately $62 billion—a significant turnaround that reflects improving industry fundamentals after months of pressure.

Market Rally and Valuation Recovery Drive $13 Billion Gain

According to JPMorgan analysts Reginald Smith and Charles Pearce, the fourteen publicly traded U.S. miners tracked by the bank benefited from a dual tailwind in early January. While bitcoin prices advanced modestly during this period, the more decisive factor has been the pullback in network computational power, which eased the intense competitive pressure that has characterized the sector throughout 2025. This relief on the supply side of mining—fewer machines competing for the same block rewards—has begun reversing some of the valuation compression that occurred previously.

Current bitcoin trading around the $83,850 level reflects a stabilization after recent volatility, providing a relatively steady backdrop for mining economics. The bank noted that valuations, while elevated, remain below the peaks reached in late 2025, suggesting that further upside remains possible if current trends persist.

Declining Hashrate Lifts Per-Unit Mining Economics and Margins

The most striking development in mining economics has been the improvement in revenue generation on a per-exahash basis. As the overall network hashrate contracted approximately 2% during the first half of January and remains meaningfully below October levels, individual miners have seen their per-unit earnings increase even as total network rewards remain constant. This dynamic fundamentally improves mining returns by reducing the number of competing participants.

Gross mining margins have expanded by roughly 300 basis points from December levels to reach approximately 47%, reflecting the combination of stable bitcoin prices and reduced competitive intensity. The hashprice—a comprehensive metric that includes both block rewards and transaction fees—rose 11% from late December through mid-January, underscoring the improved profitability environment.

However, analysts cautioned that despite these improvements, revenue per exahash remains substantially below year-ago levels. This gap highlights the persistent structural challenges facing the sector and underscores why efficiency gains and disciplined capital allocation remain critical priorities for mining operators.

Capacity Expansion Cements U.S. Miners’ Dominance in Global Mining

While profitability metrics have improved, the mining sector continues to pursue aggressive capacity expansion. JPMorgan estimates that U.S.-listed miners added approximately 12 exahash of computing capacity between late November and January, with leaders Bitdeer (BTDR) and Riot Platforms (RIOT) driving much of this growth. This buildout has pushed the combined hashrate of publicly traded U.S. operators to roughly 419 exahash—representing approximately 41% of the global network hashrate.

This market share milestone marks an all-time high for U.S.-listed miners and signals their increasing strategic importance within the global mining ecosystem. The concentration of hashing power among publicly traded operators has implications for both transparency and market dynamics in cryptocurrency proof-of-work networks.

Diversification into AI Computing Emerges as Critical Profitability Engine

Beyond traditional mining optimization, a significant theme emerging across the sector is the diversification into artificial intelligence and high-performance computing infrastructure. As miners leverage their existing data center capabilities and electrical infrastructure, they are exploring AI computing services as a supplementary revenue stream. This strategic pivot represents a fundamental shift in how mining operators conceptualize their business models—transitioning from single-commodity producers to multi-service infrastructure providers.

This diversification has become increasingly important precisely because on-chain mining returns face structural headwinds, making the ability to monetize computational capacity beyond block rewards a differentiator for long-term profitability and operational viability.

Outlook: Sustaining Momentum Requires Stable Bitcoin and Normalized Network Conditions

JPMorgan’s analysis suggests that the constructive setup for mining companies in early 2026—characterized by improving profitability, easing competitive intensity, and reasonable but not stretched valuations—can be sustained if two key conditions hold. First, bitcoin prices must remain in a stable range that supports mining economics without requiring further downside. Second, network hashrate normalization must continue, maintaining the relief on per-unit mining returns that has driven the early-2026 momentum.

The bank emphasized that while the sector has positioned itself favorably through a combination of operational efficiency and capacity growth, reversals in either of these variables could quickly alter the calculus. Miners that have successfully integrated AI and high-performance computing capabilities appear better insulated against purely on-chain mining headwinds, suggesting that this strategic diversification will likely remain a key differentiator as the industry navigates 2026.