Bitcoin mining is losing profitability: JPMorgan records crisis indicators
The mining economy of the first cryptocurrency is showing alarming signals. JPMorgan analysts estimate the average cost of mining one bitcoin at $78,000. With the current market price, which has remained below this level for five months, approximately one in five miners is operating at a loss. This is a serious indicator of structural pressure on the industry.
Growing Correlation Between Difficulty and Price: A Symptom of Instability
Hashrate and network difficulty have become much more sensitive to price fluctuations. Over the past six months, the correlation between mining difficulty and the bitcoin price has reached 0.62. This means miners are increasingly forced to shut down equipment during market downturns. In early June, mining difficulty dropped by 10% — a clear confirmation that many network participants cannot withstand current conditions.
Reserve Sell-Off: Record Volumes
Public mining companies have shifted into survival mode. In the first quarter, they sold over 32,000 BTC to cover operating expenses. This volume exceeds total sales for the entire previous year. Such dynamics indicate that even major players are experiencing an acute liquidity shortage.
Pressure on the sector will persist until bitcoin returns above the $78,000 mark. However, according to JPMorgan analysts, the current pessimism could be a signal of a turnaround. In June, on-chain data already pointed to miner capitulation, which historically often precedes a market recovery.
My comment: The situation resembles the 2018 cycle, when mass miner capitulation led to a market cleanup and subsequent growth. However, current macroeconomic conditions — high interest rates and regulatory pressure — could prolong the recovery period. Investors should closely monitor the hashrate: its stabilization will be the first sign of a bottom.