Answer Box: Bitcoin's mining hashrate and difficulty have grown increasingly sensitive to price moves as a larger share of miners operate near breakeven, JPMorgan said in a June 22 report. The bank estimates that about 20% of miners are currently unprofitable, with bitcoin trading below its estimated $78,000 production cost for five consecutive months. Publicly traded mining firms sold over 32,000 BTC in the first quarter, exceeding their total 2025 sales.
Mining Economics Worsen as Bitcoin Stays Below Production Cost
JPMorgan analysts led by Nikolaos Panigirtzoglou noted that mining difficulty's sensitivity to bitcoin price changes has risen sharply this year. The beta of mining difficulty relative to BTC price movements climbed to 0.62 over the past six months, indicating that the network's computing power is reacting more quickly to market conditions.
"Mining economics have worsened this year with the bitcoin price staying well below its production cost for five months in a row," the analysts wrote. The bank estimates the current production cost at roughly $78,000, while bitcoin was trading around $64,700 at publication time. This persistent gap has forced many miners to operate at thin margins or outright losses.
Hashrate and Difficulty React to Price Drops
When bitcoin falls below production costs, higher-cost operators tend to shut down equipment, causing hashrate to decline and difficulty to adjust lower. The bank pointed to the second week of June, when mining difficulty dropped 10% — the second decline of that magnitude this year.
Financial pressure has also prompted miners to sell more of their bitcoin holdings. Publicly traded mining companies liquidated more than 32,000 BTC in the first quarter, surpassing their combined sales for all of 2025, according to data cited by the report. JPMorgan expects heightened sensitivity in hashrate and mining difficulty to persist as long as bitcoin remains below its estimated production cost.
Miners Turn to AI and HPC for Revenue Diversification
As mining margins come under pressure, bitcoin miners are increasingly looking to artificial intelligence and high-performance computing (HPC) to diversify revenue streams. AI hosting contracts can provide stable, multi-year revenue and higher margins than bitcoin mining, which has been squeezed by rising network competition and the 2024 halving.
Analysts estimate miners have announced tens of billions of dollars in AI and HPC-related deals, though execution risks and the significant capital required to build AI-ready facilities remain key challenges. The pivot to AI mirrors a broader trend in the crypto industry, where firms are seeking alternative income sources amid volatile digital asset prices.
Outlook for Bitcoin Mining Network
JPMorgan's report underscores the fragile state of the mining ecosystem, where even small price movements can trigger outsized network adjustments. With bitcoin trading below production costs for months, the sector faces continued pressure unless prices recover or miners successfully diversify into higher-margin businesses like AI compute hosting.