Key facts
- Bitcoin has traded below its estimated production cost for five consecutive months.
- JPMorgan estimates the all-in production cost of bitcoin at $78,000.
- Publicly listed miners sold a record 32,000 bitcoin in Q1 2026 to cover operating expenses.
- Approximately 20% of the global mining industry is operating at an unprofitable level.
- Mining difficulty has seen significant adjustments due to miners operating near their cost floor.
Bitcoin has traded below its estimated cost of production for five consecutive months, a situation that is impacting miner profitability and leading to record sales of the cryptocurrency, according to JPMorgan analysts. The financial institution estimates the all-in production cost for bitcoin to be approximately $78,000, considering expenses such as electricity, hardware depreciation, and overheads.
With bitcoin currently trading near $63,000, this price-cost discrepancy has created a sustained squeeze across the mining sector. JPMorgan highlighted a structural change in the Bitcoin network's response to price fluctuations, noting an increase in the sensitivity of mining difficulty to BTC price movements. This indicates that a larger proportion of miners are operating at or near their breakeven point, adjusting their operations by switching hardware on or off in response to price shifts.
This dynamic was evident in early June when mining difficulty saw a 10.09% decrease, marking the second-largest such reduction this year. Concurrently, Bitcoin's hashrate experienced a 12% drop in June. The financial strain has compelled publicly traded mining companies to sell significant volumes of bitcoin. In the first quarter of 2026 alone, companies including MARA, CleanSpark, Riot Platforms, Cango, Core Scientific, and Bitdeer collectively sold 32,000 bitcoin to cover operating expenses. This volume surpasses their total sales for the entirety of 2025 and sets a new quarterly record, exceeding the previous high of 20,000 bitcoin in the second quarter of 2022.
Hashprice, a metric measuring mining revenue per unit of computing power, stands at approximately $33 per petahash per second per day. This level indicates that about 20% of the global mining industry is operating at an unprofitable level, according to CoinShares data cited by JPMorgan. Despite these challenging conditions, JPMorgan analysts view this weak market sentiment as a potential contrarian indicator for future price appreciation. They anticipate that elevated hashrate sensitivity and larger difficulty adjustments will persist as long as bitcoin remains below its production cost. Further capitulation among higher-cost operators is possible in the first half of 2026 if the price does not recover materially. Miners collectively held around 1.8 million bitcoin, a decrease from 1.86 million at the end of 2023, signaling ongoing treasury drawdowns.