Bitcoin has been trading below estimated mining costs for five consecutive months, leaving about one in five miners unprofitable and forcing publicly traded businesses to sell record amounts of coins, according to analysts at JPMorgan.
In a client note distributed this week, analysts led by managing director Nikolaos Panigirtzoglou said that the economic situation for Bitcoin mining will be “worsening” in 2026. JPMorgan estimates the current total cost of producing Bitcoin at around $78,000, a figure derived from electricity costs, hardware depreciation, and overall overhead costs for public miners.
Bitcoin is trading near $63,000, and the difference between the spot price and the break-even point is putting continued pressure on the entire sector.
One of the most notable changes that JPMorgan is warning about is a structural shift in how the Bitcoin network itself reacts to price movements. The beta value of mining difficulty relative to BTC price (a measure of how much difficulty changes in response to a given price change) has increased to 0.62 over the past six months. This number reflects a network with a high proportion of miners who switch their machines on and off in response to price fluctuations, rather than maintaining consistent operations.
This pattern became evident in early June, when mining difficulty fell by 10.09%, the second largest single drop this year. According to Galaxy Research, Bitcoin’s hashrate fell by 12% in June. A similar 10% difficulty drawdown occurred in January, making it the second episode of this magnitude to occur within a calendar year.
The financial squeeze has left listed miners in a bind. According to data from TheEnergyMag cited in the JPMorgan report, operators including MARA, CleanSpark, Riot Platforms, Cango, Core Scientific, and Bitdeer collectively sold 32,000 Bitcoin in the first quarter of 2026 alone to cover operating costs. This number exceeds the total Bitcoin sales of these companies for all of 2025 and set a new quarterly record, surpassing the previous high of 20,000 Bitcoin set in the second quarter of 2022 during the post-Terra Luna bear market.
According to the Hash Rate Index, the hash price, a measure of mining revenue per unit of computing power, is approximately $33 per petahash per second per day. At this level, about 20% of the global mining industry is in unprofitable territory, according to CoinShares’ Q1 2026 Bitcoin Mining Report, which JPMorgan cited in its analysis.
Bitcoin contrarian signal
Despite the tough conditions, JPMorgan analysts stopped short of issuing a bearish conclusion. The researchers noted that this type of weak market sentiment has served as a contrarian indicator of future price increases in past cycles.
They expect increased hashrate sensitivity and greater difficulty adjustments to continue as long as BTC remains well below production costs.
Absent a recovery in material prices, further capitulation of high-cost operators could occur in the first half of 2026. At the time of publication, miners held approximately 1.8 million Bitcoins in total, down from 1.86 million Bitcoins at the end of 2023. This indicates that Treasury withdrawals are an ongoing feature of the current environment.
