Bitcoin Trading Below $78K Mining Cost, Squeezing Operators
In brief
- Bitcoin trades ~$62,500, below JPMorgan's estimated mining cost of ~$78,000
- 20% of miners unprofitable per CoinShares data cited by JPMorgan
- Publicly traded miners sold 32,000+ bitcoin in Q1, exceeding all 2025 sales
- Mining difficulty dropped 10% in early June as unprofitable operators shut down
- JPMorgan projects larger, more frequent difficulty adjustments below production cost
Mining Economics Under Pressure
Bitcoin has spent five straight months trading below what it costs to produce, squeezing miners and forcing some to sell, JPMorgan said in a note. The pressure is acute: the bank pegs the cost to mine one bitcoin at about $78,000, well above the roughly $62,500 the asset fetches now.
The math doesn't work for a growing segment of the industry. About 20% of miners are now unprofitable, according to CoinShares data cited by JPMorgan. That unprofitability is driving forced selling: publicly traded miners sold more than 32,000 bitcoin in the first quarter to cover operating costs, more than they offloaded in all of 2025.
The Feedback Loop: Difficulty and Hashrate
When the price drops below cost, higher-cost miners power down. This reduces the network's total computing power—the hashrate. Mining difficulty, the automatic setting for how hard it is to mine, resets lower in response.
That cycle played out in early June. Difficulty dropped 10%, the second decline of that size this year. The sensitivity is intensifying. The sensitivity of difficulty to price has climbed, with more operators sitting near breakeven.
JPMorgan expects this volatility to persist. The bank expects larger and more frequent adjustments for as long as bitcoin stays below its production cost.
A Contrarian Angle
The weakness in mining sentiment may contain a hidden signal. The weak sentiment around the sector could itself prove a bullish contrarian signal, JPMorgan noted. Historically, extreme pessimism has often marked market bottoms. Whether that holds depends on Bitcoin's next move.
