Bitcoin mining operations are under sustained pressure as the cryptocurrency has traded below its estimated production cost for five consecutive months, according to JPMorgan. The bank estimates that about 20% of miners are now unprofitable, pushing several publicly listed firms to sell bitcoin reserves to keep running.
The average cost to mine one bitcoin has climbed to around $78,000, while the asset recently traded near $62,500. In the first quarter alone, miners sold more than 32,000 bitcoin to fund operations, exceeding total sales recorded across all of 2025, based on industry data cited by the bank.
Selling pressure builds across the sector
This wave of selling is becoming a key factor for traders watching price movements. On-chain indicators point to financial strain, including the Puell Multiple dropping to 0.74 in early June, a level typically associated with reduced miner revenue compared to historical norms.
As miners continue to offload holdings, this creates a steady stream of supply that the market must absorb before any sustained price recovery can take hold.
Mining activity shows higher sensitivity to prices
JPMorgan analyst Panigirtzoglou noted that mining difficulty and hashrate are becoming more reactive to price swings. Over the past six months, the correlation between bitcoin prices and mining difficulty has increased significantly, reflecting how operators are switching machines on and off depending on profitability.
A 10% drop in mining difficulty in mid-June marked the second such decline this year, following a similar adjustment in January. These pullbacks typically occur when higher-cost miners suspend operations during periods of weak prices.
Network adjusts as weaker players exit
The recent difficulty adjustment, which lowered mining difficulty to its lowest level since July 2025, highlights a growing divide within the sector. Operations with access to cheaper energy and more efficient hardware are continuing, while less competitive players are exiting.
This self-correcting mechanism benefits remaining miners by increasing their share of rewards. Early estimates suggest the next adjustment could reverse course, with a modest increase in difficulty as some computing power returns to the network.
Outlook tied to market structure and regulation
JPMorgan expects continued volatility in mining activity as long as bitcoin trades below production cost, with more frequent and larger difficulty adjustments likely in the months ahead.
The bank has also turned more cautious on the broader crypto market after a more optimistic stance earlier in 2026. It said any recovery in the second half of the year will likely depend on stronger corporate balance sheets within the sector and progress on U.S. legislation.
A key bill, the Financial Innovation and Technology for the 21st Century Act, or FIT21, has passed the House of Representatives but faces an uncertain path in the Senate. If enacted, it would clarify whether digital assets fall under securities or commodities law, a step many in the industry believe could bring greater stability to the market.
Want to understand miner costs and profitability cycles better? Read our detailed guide: deep dive into Bitcoin mining economics.
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