Bitcoin mining under pressure: JPMorgan records record losses and a decline in hashrate
The Bitcoin mining economy is experiencing one of its most challenging periods in recent years. Based on data from leading financial institutions, I estimate the average cost of mining one coin is currently around $78,000. At the current market price, this means roughly one in five miners is operating at a loss—a situation that has persisted for five consecutive months.
Particularly alarming is the sharp shift in miner behavior. The correlation between network difficulty and Bitcoin's price has risen to 0.62 over the past six months. This indicates that market participants have become much more sensitive to price fluctuations: when the price drops, they massively shut down equipment, which led to a 10% decline in mining difficulty in early June.
Public mining companies are forced to actively sell off their reserves. In the first quarter alone, they sold over 32,000 BTC—exceeding the total sales volume for all of last year. This trend points to an acute need for liquidity to cover operational expenses.
As long as Bitcoin remains below the critical level of $78,000, pressure on the industry will persist. However, in my view, the current pessimism may be a false signal. Historically, periods of maximum miner capitulation have often preceded market reversals. On-chain data from June already shows signs of capitulation, which could be a precursor to recovery.
My opinion: The mining market is undergoing a phase of cleansing, which is inevitable after the halving. Those who can survive this period through low operational costs or diversification into AI infrastructure will emerge from the crisis significantly stronger. Current losses are the price to pay for future industry consolidation.