According to a recent assessment from JPMorgan, Bitcoin (BTC) has been trading below its production cost for the past five months. JPMorgan estimates that mining 1 BTC currently costs around $78,000, while the market price sits at approximately $62,500. This persistent gap is putting significant pressure on miners, especially those operating with higher costs.
Strain intensifies on miners
The bank’s report, based on CoinShares data, points out that nearly 20% of miners are now operating at a loss. Publicly listed mining companies, struggling to cover operating expenses, sold more than 32,000 BTC in the first quarter alone—a volume already surpassing all their 2025 sales combined.
JPMorgan highlights that BTC has traded below its production cost for five straight months, pushing some miners to liquidate their holdings under mounting financial stress.
As the margin between mining revenues and costs shrinks, especially due to high electricity and equipment expenses, some companies have become increasingly vulnerable. The real concern is that if prices stay below cost for an extended period, smaller or less efficient operators may be forced out of the sector.
Network difficulty adjusts downward
The Bitcoin network counters these pressures through automatic mechanisms. When the BTC price drops below production cost, miners with higher expenses tend to shut down their machines. This leads to a decrease in total network computing power, or hashrate, which then triggers an automatic reduction in mining difficulty—making it easier for remaining miners to validate new blocks.
Quick reference: Hashrate represents the total computational power securing the Bitcoin network. Mining difficulty is a parameter that dictates how challenging it is to produce new blocks and is automatically updated roughly every two weeks.
This mechanism activated again in early June, with mining difficulty falling by 10%. This marks the second such significant drop within this year, signaling the network’s ongoing adaptation to miner pressures.
Miners respond faster to price swings
JPMorgan indicates that Bitcoin miners now react to price changes more quickly than in the past. The bank observes that network difficulty has become more sensitive to real-time prices, with more operations working close to break-even and therefore switching equipment on and off more frequently based on short-term price moves.
The bank notes that as long as BTC trades below its production cost, network difficulty adjustments are likely to become larger and more frequent.
Within this context, as long as Bitcoin remains below production cost, network turbulence is expected to persist. While JPMorgan maintains a cautious outlook for the broader market, it suggests the current negative sentiment may actually be a contrary indicator. According to the bank, developments such as major institutional accumulation and falling exchange reserves could be signals that some investors view lower prices as a buying opportunity.
