Bitcoin {{BTC}} mining stocks gave back artificial intelligence (AI) related gains in the first two weeks of August as the network hashrate rose which pushed mining profitability to record lows, JPMorgan (JPM) said in a research report on Friday.

Hashrate refers to the total combined computational power that is used to mine and process transactions on a proof-of-work blockchain.

The total market cap of the fourteen U.S. listed miners the bank tracks fell 18% since the end of July, and "currently trade 2X their proportional share of the four-year block reward," analysts Reginald Smith and Charles Pearce wrote.

It's not all bad news for the sector. U.S.-listed miner's share of the Bitcoin network hashrate rose for the fourth month in a row to 26%, a new record high, the report said.

The network hashrate rose around five exahashes per second (EH/s), a 1% gain, to an average of 621 EH/s in the first two weeks of the month, the bank said, noting that it is still 30 EH/s below the levels seen before the halving.

The hashprice, a measure of mining profitability, is still around 30% lower than the levels seen in December 2022 and about 40% below pre-halving levels, and this could slow hashrate growth in the near term, the report added.

The bank noted that the bitcoin price has dropped about 5% since the halving, but is still up 35% year-to-date and 104% year-on-year.

U.S.-Listed Bitcoin Miners' Share of Global Hashrate Reached Record in July: JPMorgan