JPMorgan estimates that the cost of producing one Bitcoin has decreased from $90,000 to $77,000 since the beginning of the year due to a reduction of approximately 15% in hashrate and mining difficulty.
According to the analysis team led by CEO Nikolaos Panigirtzoglou, the reduction in production costs is bringing relief to active Miners . Previously, this cost level often Vai as a soft price floor for Bitcoin, as the price typically found support around that area because Miners were unwilling to sell below cost.
The recent decline is due to a decrease in hashrate – the total computing power used to mine Bitcoin – over the past few months, which in turn has led to a decrease in mining difficulty as a result of the network's automatic adjustment mechanism.
The mining difficulty, recalculated approximately every two weeks, is designed to keep block creation rates predictable, ensuring new blocks are added approximately every ten minutes. When fewer miners are involved, the network lowers the difficulty, making it easier for the remaining Miners to solve the cryptographic problems necessary to add new blocks.
JPMorgan points to two main reasons for this decline. First, the drop in Bitcoin's price this year has made mining less attractive to those with high electricity costs or using older equipment, forcing many Miners to shut down their equipment because it is no longer profitable to operate.
Secondly, severe winter storms in the U.S., particularly in Texas where hundreds of mining operations are located, have forced many sites to shut down as grid operators restrict consumption to protect the power system.
Signs of recovery and positive outlook.
Historically, a sharp drop in mining difficulty has often been XEM as a sign of Miners giving up, similar to 2021 when China banned Bitcoin mining, causing the difficulty to drop by about 45% from May to July. Some high-cost Miners sold their Bitcoin reserves to fund operating costs, reduce debt, or shift their focus to artificial intelligence projects, adding further pressure on Bitcoin's price since the beginning of the year.
However, JPMorgan suggests that the negative aspects of this correction may be over. As weaker players leave the market, the remaining Miners are typically stronger and more efficient, with a higher probability of receiving Bitcoin rewards as the number of competitors decreases. The bank observes signs of a recovering hashrate, and if this trend continues, mining difficulty and production costs could rise again in the next update.
Despite recent challenges, JPMorgan remains optimistic about the cryptocurrency market heading into 2026. In its “Alternative Investments Outlook and Strategy” report, the bank expects stronger Capital into digital assets, primarily from institutional investors, as the US adds clearer regulations, such as the Clarity Act.
JPMorgan also reiterated its long-term price target of $266,000 for Bitcoin, based on a comparison with gold and adjusted for price volatility. At the time of writing, Bitcoin is trading around $65,660, down more than 1% in the last 24 hours.
