Miners on the brink: the cost of mining bitcoin has exceeded the market price, forcing a mass sell-off.
The Bitcoin (BTC) market is experiencing another period of turbulence. The drop in the price of the leading cryptocurrency below the key level of $60,000 in early June has put significant pressure not only on speculative traders but also on fundamental network participants—miners. My analysis of miner fund flows to exchanges reveals a concerning picture: mining companies are forced to actively offload their reserves to cover rising operational costs.
Problems in the mining sector have been building for months. Since late October last year, the network's hashrate has dropped by nearly 28%. This is a clear signal that a significant portion of miners have been forced to either shut down equipment or move it to regions with cheaper electricity. Unsurprisingly, the drop in computing power was followed by an adjustment in network difficulty—it decreased by about 20% over the same period.
However, even the network's automatic adjustment does not save the situation. The key factor is the cost of mining. According to my estimates, at current electricity prices and with the aging ASIC miner fleet, the average cost of mining one BTC hovers around $76,000. With a market price of about $65,000, operating at a loss becomes a reality for most mining pools and individual miners.
Wave of Inflows to Binance: A Double Blow to Price
When margins turn negative, miners are forced to sell mined coins to pay their bills. This is clearly visible in the data on inflows to the Binance exchange, which is the primary hub for liquidity.
A similar situation was observed back in February, when the BTC price tested the $60,000 zone for the first time since November 2023. Then, on February 5, miners sent over 24,000 BTC to Binance in a single batch, pushing the average monthly inflow from 5,000 to over 8,000 BTC.
In June, history repeated itself with renewed force. For four consecutive days, daily miner inflows to Binance exceeded 10,000 BTC, peaking at 12,800 BTC. The average monthly figure surged from 4,700 to 7,100 BTC. Such massive selling in a falling market creates a "double blow" effect: miners not only lock in losses but also amplify bearish pressure through their own actions.
Expert opinion from Cryptalist: The current situation demonstrates a classic miner capitulation cycle. Until the Bitcoin price returns to a comfortable profitability zone (above $75,000), we will see a constant backdrop of forced selling. This creates strong resistance for any upward movement. Investors should closely monitor the hashrate and network difficulty—their stabilization will be the first signal that pressure from miners is easing.