JPMorgan Says Bitcoin Mining Profitability Is Worsening as BTC Stays Below Production Cost for Five Months

Bitcoin has remained below miners’ estimated production cost for five straight months, increasing pressure on profitability across the mining industry.

The Block reported on June 18 that JPMorgan said in a report that Bitcoin’s hash rate and mining difficulty have become more sensitive to price swings this year.

JPMorgan said the correlation between Bitcoin’s price and mining difficulty has increased over the past six months.

Many miners are operating near break-even, the bank said, making them more likely to decide whether to keep equipment running based on changes in Bitcoin’s price.

The report said that when Bitcoin falls below production cost, miners with heavier operating expenses shut down equipment. That reduces the network hash rate and leads mining difficulty to adjust lower.

Mining difficulty fell about 10% in the second week of June.

JPMorgan said the trend signals worsening profitability for miners in recent months.

Market participants said that if Bitcoin’s price weakness persists, operating strain could intensify, particularly for small and mid-sized mining companies.