Bitcoin Has Been Trading Below Mining Cost for Five Months, JPMorgan

TLDR

• JPMorgan said Bitcoin has traded below production cost for five straight months.
• JPMorgan estimated Bitcoin’s current production cost at about $78,000.
• BTC traded near $62,500 to $62,900 during the latest market session.
• About 20% of Bitcoin miners are now estimated to be unprofitable.
• Public miners sold more than 32,000 BTC in Q1 2026 to fund operations.

Bitcoin mining economics have weakened in 2026 as BTC continues to trade below its estimated production cost, according to JPMorgan analysts, adding pressure on miners while the broader market remains under selling pressure.

JPMorgan analysts led by Nikolaos Panigirtzoglou said Bitcoin has traded below its estimated production cost for five consecutive months. The bank currently places Bitcoin’s production cost near $78,000, while BTC was trading around $62,500 to $62,900 during the latest market session.

The gap between market price and production cost has increased pressure on higher-cost miners. JPMorgan cited CoinShares data showing that about 20% of Bitcoin miners are now estimated to be unprofitable, while public mining companies have been selling BTC to fund operations.

Bitcoin Trades Below Estimated Production Cost

Bitcoin’s market price remained well below JPMorgan’s estimated $78,000 production cost, a level that reflects the average expense of mining one BTC based on energy costs, equipment efficiency, network difficulty, and hashrate conditions.

Source: X

When Bitcoin trades below production cost, miners with higher electricity costs or less efficient machines face reduced margins. Some may power down machines to limit losses, which can reduce network hashrate and later lead to lower mining difficulty.

JPMorgan said this pattern appeared in the second week of June, when Bitcoin mining difficulty dropped 10%. The bank noted that this was the second decline of that size so far this year, following another similar adjustment in January.

The analysts said Bitcoin’s hashrate and mining difficulty have become more responsive to price changes this year. Over the past six months, the beta of mining difficulty to Bitcoin prices rose to 0.62, suggesting that more miners are operating close to breakeven and adjusting activity as prices move.

Public Miners Sell Bitcoin to Fund Operations

Publicly traded Bitcoin miners sold more than 32,000 BTC during the first quarter of 2026 to fund operating expenses, according to JPMorgan’s report, which cited TheEnergyMag data. That amount exceeded their combined Bitcoin sales for all of 2025.

The miner sales show how weaker market prices can affect balance sheets across the mining sector. Companies that rely on mined Bitcoin reserves to cover power, hosting, debt, or expansion costs may sell more coins when cash flow tightens.

JPMorgan said larger and more frequent mining difficulty adjustments may continue as long as Bitcoin trades well below its production cost. That environment could keep weaker miners under pressure while more efficient operators gain relative advantage.

The pressure comes during a period when Bitcoin has also struggled to recover price momentum. BTC recently traded near $62,900, with market capitalization around $1.26 trillion and 24-hour trading volume near $30 billion, while sellers continued to defend higher levels.

Network Activity and Whale Balances Offer Mixed Signals

Despite weaker mining economics, Bitcoin network activity has increased. CryptoQuant data showed that micro-transactions below 0.01 BTC now account for about 80% of all Bitcoin transactions, up from less than 50% in 2023.

The rise in smaller transactions has been linked to Runes, Ordinals, inscriptions, and OP_RETURN activity. Analysts described the growth as activity-driven rather than value-driven, meaning the increase reflects more frequent smaller transactions rather than larger settlement flows.

At the same time, whale accumulation has returned to focus. Santiment data cited by market commentators showed wallets holding at least 1,000 BTC increased their balances to 7.17 million BTC, the highest level since March.

Source: X

Whale accumulation may reduce available supply if large holders continue adding coins, although it does not guarantee immediate price recovery. The data shows a contrast between miner stress and accumulation by larger holders during the same market downturn.

JPMorgan maintained a cautious outlook on mining conditions, but the analysts also said weak market sentiment could eventually become a bullish contrarian signal.

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