Bitcoin mining stocks end 2025 strong despite December slump: JPMorgan

Core Insights - Bitcoin mining stocks ended 2025 positively despite a challenging December, with a total market value increase of 73% for the year, even after a decline from October's peak of $70 billion [1] Group 1: Market Performance - The aggregate market capitalization of 14 bitcoin miners fell 18% month-over-month in December to $48 billion, while daily bitcoin mining revenue decreased by 7% [1] - The monthly average price of bitcoin (BTC) dropped 8% in December to $88,950, with a seven-day rolling average of approximately $88,500 [2] - Individual stock performance varied, with Hut 8 (NASDAQ: HUT) shares rising 2% in December, while CleanSpark (NASDAQ: CLSK) experienced a 33% decline [7] Group 2: Mining Economics - Mining economics faced pressure as December's average daily revenue of $38,700 per EH was the lowest on record, leading to a 9% decline in gross profit per EH to $17,100, resulting in estimated gross margins of 44% [3] - The network hashrate declined for the second consecutive month in December, with a 3% drop to an average of 1,045 EH/S [4] Group 3: Sector Valuation and Trends - Valuations for the sector have contracted but remain elevated, trading at 107% of the four-year block reward opportunity as of December 31, down from a record high of approximately 120% but still more than double the historical average of 45% [5] - Investors are re-rating the sector as operators diversify into high-performance computing (HPC) and AI cloud services, with over 3 gigawatts of gross capacity signed for HPC and AI colocation throughout 2025 [6] Group 4: Company Performance - Only two of the 14 tracked companies outperformed the price of bitcoin in December, but nine companies exceeded the digital asset's return for the entire year, with IREN (NASDAQ: IREN) and Cipher Mining (NASDAQ: CIFR) leading with gains of 285% and 218%, respectively [8]