An increasing share of bitcoin miners are operating close to breakeven, leaving the network’s hashrate and mining difficulty more sensitive to fluctuations in price, JPMorgan said.
According to the bank, the mining ecosystem is becoming more reactive as profit margins compress. This year, both hashrate and mining difficulty have shown a stronger link to bitcoin’s price movements. Over the past six months, the beta of mining difficulty relative to BTC has risen to 0.62, signaling that network computing power is adjusting more quickly to market shifts.
“Mining economics have weakened significantly this year, with bitcoin trading below its production cost for five straight months,” analysts led by Nikolaos Panigirtzoglou wrote in a report.
Hashrate measures the total computational power securing a proof-of-work blockchain and is expressed in exahashes per second.
The analysts noted that a growing portion of miners are now operating near cost, making the overall hashrate increasingly vulnerable to price swings.
JPMorgan added that mining conditions have deteriorated in 2026, with bitcoin consistently trading below estimated production costs. Referencing CoinShares’ first-quarter report, the bank estimates roughly 20% of miners are currently running at a loss.
Rising financial pressure has forced miners to sell more of their bitcoin reserves. Publicly traded mining firms liquidated over 32,000 BTC in the first quarter, exceeding their total sales for all of 2025.
As a result, even small price changes are having a larger impact on network dynamics. When bitcoin drops below production costs, higher-cost miners tend to shut down operations, leading to declines in hashrate and corresponding reductions in mining difficulty. JPMorgan highlighted the second week of June, when mining difficulty fell 10% — the second such drop this year.
Looking ahead, the bank expects this heightened sensitivity to persist as long as bitcoin remains below its estimated production cost, currently pegged at around $78,000. Bitcoin was trading near $64,700 at the time of writing.
With mining margins under pressure, operators are increasingly pivoting toward artificial intelligence (AI) and high-performance computing (HPC) to diversify revenue streams.
The appeal lies in more stable, long-term income from AI hosting contracts, which can offer higher margins than traditional bitcoin mining — an industry facing rising competition and the impact of the 2024 halving.
Analysts estimate miners have already announced tens of billions of dollars in AI and HPC initiatives, though execution risks and the heavy capital investment required to build AI-ready infrastructure remain significant challenges.
