JPMorgan sees sharp market cap decline in recent months

The Bitcoin mining sector has witnessed a worrying fall in market capitalization, as highlighted in a detailed report by JPMorgan. The analysis shows that the combined market value of 14 publicly traded companies, including well-known entities such as MARA and Core Scientific, plummeted by an impressive 25% in March. This equates to a loss of roughly $6 billion in March. 

The report emphasizes the growing instability within the Bitcoin industry, which has been exacerbated by a significant drop in crypto prices. According to JPMorgan, companies heavily invested in high-powered computing are "generally underperforming" compared to those that focus solely on Bitcoin mining. Some market players may be diversifying into the AI data center sector to stabilize their revenues as a result of this change in operational strategies.

Bitcoin has fallen nearly 22% from its all-time high of $109,580, further straining the profitability of such activities. As the crypto depreciates, miners are struggling to cover their operating expenses, which encompass electricity costs and equipment maintenance. On top of that, the need for more resources to validate transactions on the blockchain adds to their financial burden.