Bitcoin has faced significant challenges in the market, trading below the estimated cost of mining for five consecutive months. Analysts from JPMorgan have highlighted that this situation has rendered nearly one in five miners unprofitable while pressing publicly listed firms to liquidate record amounts of their mined coins. In a recent client note, the team led by managing director Nikolaos Panigirtzoglou elaborated on the deteriorating economics surrounding bitcoin mining, particularly noting a calculated all-in production cost of around $78,000.
As bitcoin hovers near the $63,000 mark, a substantial gap between the market price and the breakeven point has caused substantial financial strain across the sector. Analysts observed a fundamental shift in the Bitcoin network’s response to price fluctuations, characterized by an increase in the beta measure of mining difficulty relative to BTC prices, which has risen to 0.62 over the past six months. This indicator suggests that many miners are operating near their cost thresholds and are adjusting their operations—turning mining machines on or off—based on current price movements, rather than maintaining stable mining processes.
This trend became particularly evident in June, when mining difficulty saw its second-largest single decline of the year at 10.09%. At the same time, data from Galaxy Research showed that bitcoin’s hashrate had decreased by 12%. Notably, this decline in difficulty mirrors a similar 10% drop that occurred in January, marking two instances of significant difficulty reduction within the same year.
The economic pressures have placed publicly traded mining companies in a precarious position. Major operators such as Marathon Digital Holdings, CleanSpark, Riot Platforms, Cango, Core Scientific, and Bitdeer collectively sold approximately 32,000 bitcoins in the first quarter of 2026 to cover operating expenses. This volume not only surpasses the total bitcoin sales of these companies for all of 2025, but it also marks a new quarterly record, exceeding the previous high of 20,000 bitcoins sold in the second quarter of 2022 amid the bear market following the Terra-Luna collapse.
The metric known as hashprice, which reflects mining revenue per unit of computing power, currently sits at about $33 per petahash per second per day. This low revenue level has left around 20% of the global mining sector in unprofitable conditions, as noted in CoinShares’ Q1 2026 Bitcoin Mining Report, which was referenced in the JPMorgan analysis.
Despite these adverse conditions, JPMorgan’s analysts refrained from issuing a bearish outlook. Instead, they pointed out that weak market sentiment often serves as a contrarian indicator for potential future price increases. They anticipate heightened sensitivity in hashrate adjustments and larger changes in mining difficulty will persist as long as bitcoin remains substantially below its production cost. The possibility of further capitulation among higher-cost mining operators looms large if price recovery does not materialize in the first half of 2026.
At the time of analysis, miners collectively held approximately 1.8 million bitcoins, a decrease from 1.86 million at the end of 2023, which underscores the trend of ongoing treasury drawdowns in the current landscape.
