TLDR
- JP Morgan said bitcoin has been trading below the cost of production for five straight months.
- JP Morgan estimated the current production cost of Bitcoin at around $78,000.
- BTC traded near $62,500 to $62,900 during the last market session.
- It is now estimated that about 20% of Bitcoin miners are unprofitable.
- Public miners sold more than 32,000 bitcoins in the first quarter of 2026 to fund operations.
The economics of Bitcoin mining have weakened in 2026 as Bitcoin continues to trade below its estimated production cost, according to JPMorgan analysts, increasing pressure on miners while the broader market remains under selling pressure.
JPMorgan analysts led by Nikolaos Panigirzoglou said that Bitcoin has traded below its estimated cost of production for five straight months. The bank currently puts the cost of producing Bitcoin near $78,000, while BTC was trading at around $62,500 to $62,900 during the last market session.
The gap between the market price and the cost of production 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 are selling Bitcoin to fund operations.
Bitcoin is trading below its estimated production cost
Bitcoin’s market price has remained well below JPMorgan’s estimated production cost of $78,000, a level that reflects the average cost of mining a single bitcoin based on energy costs, equipment efficiency, network difficulty, and hash rate conditions.
source: X
When Bitcoin trades below the cost of production, miners with higher electricity costs or less efficient machines face lower profit margins. Some may turn off devices to limit losses, which may reduce the network hash rate and subsequently lead to a decrease in mining difficulty.
JPMorgan said this pattern emerged in the second week of June, when Bitcoin mining difficulty fell by 10%. The bank noted that this is the second decline of this size so far this year, following another similar adjustment in January.
Analysts said that Bitcoin hash rate and mining difficulty have become more responsive to price changes this year. Over the past six months, the mining difficulty beta for Bitcoin prices has risen to 0.62, indicating that more miners are operating near the break-even point and adjusting activity as prices move.
Public miners sell Bitcoin to fund operations
Publicly traded Bitcoin miners It sold more than 32,000 bitcoins during the first quarter of 2026 to fund operating expenses, according to a JPMorgan report, which cited TheEnergyMag data. This amount exceeded the combined Bitcoin sales for the entire year of 2025.
Miner sales show how weaker market prices can impact balance sheets in the mining sector. Businesses that rely on mined Bitcoin reserves to cover energy, hosting, debt, or expansion costs may sell more coins when cash flow shrinks.
JPMorgan said larger and more frequent mining difficulty adjustments may continue as long as bitcoin trades well below the cost of production. This environment can keep weaker miners under pressure while more efficient operators gain a comparative advantage.
The pressure comes during a period when Bitcoin has also struggled to regain price momentum. BTC recently traded near $62,900, with a market capitalization of around $1.26 trillion and 24-hour trading volume approaching $30 billion, while sellers continued to defend higher levels.
Network activity and whale stocks provide conflicting signals
Despite the weak mining economics, Bitcoin network activity has increased. Small transactions of less than 0.01 BTC now account for about 80% of all Bitcoin transactions, up from less than 50% in 2023, CryptoQuant data showed.
The rise in microtransactions 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 smaller, recurring transactions rather than larger settlement flows.
Meanwhile, the whale buildup has come back into focus. Santiment data cited by market commentators showed that wallets containing at least 1,000 BTC increased their balances to 7.17 million BTC, the highest level since March.
source: X
Whale accumulation may reduce the available supply if large holders continue to add coins, although this does not guarantee an immediate price recovery. The data shows a contrast between pressure from miners and accumulation by large holders during the same period of market decline.
JPMorgan maintained a cautious outlook on mining conditions, but analysts also said weak market sentiment could eventually become a bullish mixed signal.
