Bitcoin Mining Network More Sensitive to Price Swings, JPMorgan Says
JPMorgan reports that bitcoin's mining network is becoming increasingly sensitive to price movements as more miners operate near breakeven levels. The bank notes that the beta of mining difficulty relative to BTC price has climbed to 0.62 over the past six months, indicating quicker responsiveness. Mining economics have deteriorated, with bitcoin trading below its estimated production cost of $78,000 for five consecutive months. Roughly 20% of miners are estimated to be unprofitable, leading to increased selling of bitcoin holdings by publicly traded mining companies, which sold over 32,000 BTC in Q1, surpassing 2025's total. Even small price moves now affect network activity, with high-cost operators shutting down equipment when prices fall, causing hashrate declines and difficulty adjustments. The bank expects this sensitivity to persist as long as bitcoin remains below production cost. Miners are diversifying into AI and high-performance computing for stable revenue.
Key facts
- Mining difficulty beta vs BTC price hit 0.62 over six months, up sharply.
- Bitcoin traded below $78,000 production cost for five straight months.
- Roughly 20% of miners are estimated unprofitable, per CoinShares data.
- Public miners sold 32,000+ BTC in Q1, exceeding 2025 total sales.
- Miners diversify into AI/HPC for stable revenue amid margin pressure.