The mining industry on the brink: JPMorgan diagnoses a bitcoin cost crisis
The economics of mining the first cryptocurrency are experiencing one of the most challenging periods in recent years. The current market conditions have resulted in Bitcoin trading below the actual cost of mining for five consecutive months. This is a direct indication of structural pressure on the industry.
My calculations, based on data from leading analytical groups, show that the average cost of mining one BTC is approximately $78,000. At the current exchange rate, this means that roughly one in five miners is operating at a loss. The situation is exacerbated by the fact that the hashrate and network difficulty have become much more sensitive to price fluctuations. The correlation between these indicators over the past six months has risen to 0.62, indicating mass equipment shutdowns at the slightest market downturns. In early June, we already observed a 10% drop in difficulty — this is not a coincidence but a pattern.
Public mining companies, facing a liquidity shortage, have begun selling off their reserves at an unprecedented pace. In the first quarter alone, they sold over 32,000 BTC — exceeding the total sales volume for the entire previous year. Such aggressive selling creates additional pressure on the market.
Until Bitcoin returns above the $78,000 mark, pressure on miners will persist. However, as practice shows, it is precisely during moments of maximum pessimism and capitulation that new growth cycles often emerge. The industry is undergoing a "purge" that will likely strengthen the positions of the most efficient players.