Cost floor: Bitcoin mining has entered a loss zone for 20% of pools
The mining economy of the first cryptocurrency is under serious pressure. Since the beginning of the year, the industry has faced a steady deterioration in fundamental indicators. Bitcoin has been trading below the average mining cost for five consecutive months, calling into question the profitability of a significant portion of capacity.
According to my calculations based on the latest data, the average cost of mining one bitcoin is approximately $78,000. At current market prices, about 20% of miners are operating at a loss. This is a critical threshold beyond which mass equipment shutdowns and reserve sell-offs begin.
Hashrate and Price Correlation: A New Reality
The network's behavior has changed particularly significantly. The correlation between mining difficulty and the bitcoin exchange rate has risen to 0.62 over the past six months. This means miners have become much more sensitive to price fluctuations. When the price drops, they quickly shut down equipment, leading to sharp swings in difficulty. In early June, for example, difficulty plummeted by 10% — one of the steepest declines in recent years.
Public mining companies have already begun actively offloading their accumulated reserves. In the first quarter, they sold over 32,000 BTC — more than in the entire previous year. This trend indicates that operating costs are weighing on balance sheets, forcing companies to sell coins to stay afloat.
Forecast and Reversal Signals
Pressure on the industry will persist until bitcoin returns above the $78,000 mark. However, from a market cycle perspective, the current pessimism could be a harbinger of a reversal. The miner capitulation observed in June, according to on-chain data, has historically often preceded local lows. The question is whether the market has enough strength to absorb this sales volume without a deep correction.
My opinion: As long as miners continue to sell reserves, the market will remain under pressure. But if bitcoin holds above $60,000, the industry may navigate this cycle with minimal losses for major players. Small pools operating on outdated equipment risk not surviving until the recovery.