BTC Mining Cost Drops Below $50K as Unprofitable Miners Exit: JPMorgan's Latest Analysis

According to JPMorgan’s recent research, the cost of mining Bitcoin has fallen to approximately $45,000, down significantly from above $50,000 previously. This decline reflects a critical shift in the network’s miner composition, as operations with inefficient equipment have begun exiting the Bitcoin blockchain. The analysis highlights how current hashrate and power consumption levels on the network directly correlate to mining profitability thresholds.

The Compression of Mining Economics Post-Halving

The halving event that occurred last month directly triggered this shift in mining cost dynamics. When Bitcoin’s block rewards are sliced by 50%, miners immediately face margin compression unless they can offset losses through alternative revenue streams. JPMorgan’s analysis, led by analyst Nikolaos Panigirtzoglou, indicates that the bank had anticipated a significant hashrate drop following the halving, as unprofitable operators would have no economic reason to continue mining at previous equipment efficiency levels.

However, this transition did not happen as swiftly as expected. The recent decline in mining cost represents the market slowly working through the profitability reset that the halving introduced.

Why the Delay: The Runes Protocol Surprise

The temporary delay in widespread miner exits can be attributed to an unexpected revenue catalyst: the launch of the Runes protocol. This new token creation framework on Bitcoin triggered a dramatic and sudden surge in network transaction fees. Mining revenue, which normally derives from block rewards (the newly created BTC) and transaction fees (paid by users), suddenly received a substantial boost from fee income.

“Bitcoin miners were able to offset the loss in issuance reward due to halving with the surge in transaction fees, keeping the block rewards for miners almost unchanged,” JPMorgan noted. This short-term spike created an artificial floor under miner profitability, delaying the exit of inefficient operations that would otherwise have become unviable immediately post-halving.

That temporary support proved fleeting. As user interest in Runes activity faded over recent weeks, transaction fee revenue collapsed alongside it. Without the fee cushion, miners operating at the margin found themselves unable to sustain operations, accelerating their exit from the network.

The Hashrate Adjustment: Evidence of Market Rationalization

A key observation from JPMorgan’s analysis concerns the relationship between power consumption and hashrate. While both metrics declined, power consumption fell more sharply than hashrate, indicating that miners exiting the network were disproportionately those running older, less efficient mining equipment.

This selective exit represents a natural market cleanup. Older ASIC miners and operations with poor energy efficiency cannot compete at current BTC prices when mining costs remain elevated. Their departure reduces the network’s average power draw while having a proportionally smaller impact on total computational power—a clear sign that the least competitive participants are being flushed out.

The Feedback Loop: Price Pressure and Miner Survival

JPMorgan highlights a critical market dynamic: the inverse relationship between Bitcoin price and miner profitability. As BTC prices decline, the number of miners operating at a loss increases exponentially. These unprofitable miners face mounting pressure to shut down, which reduces hashrate and ultimately reduces the cost to mine new Bitcoin. However, further price declines can compress margins again, creating a potentially vicious cycle.

The bank notes that “the more bitcoin prices decline the higher the number of unprofitable miners that come under pressure to leave the Bitcoin network and the larger the resulting decline in the hashrate and bitcoin production cost.” This creates both a floor and a potential downward spiral depending on macro conditions—a delicate equilibrium that market participants are now carefully monitoring.

JPMorgan’s Near-Term Bitcoin Outlook: Limited Catalysts Ahead

Despite the adjustment in mining cost metrics, JPMorgan maintains a cautious stance on BTC’s near-term price direction. The bank identifies several headwinds restraining upside potential, including an absence of positive catalysts and the disappearance of retail investor enthusiasm that previously drove market rallies.

Recent price action illustrates this challenge: Bitcoin briefly approached $70,000 before retreating to around $68,000, failing to reclaim the key resistance level. Meanwhile, altcoins including Ethereum, Solana, and other tokens have shown greater relative strength, suggesting that market participants are rotating toward higher-risk assets rather than establishing new Bitcoin positions.

What’s at Stake for the Mining Industry

The compression in mining costs and ongoing consolidation of miner operators raises important questions about the industry’s long-term structure. As inefficient miners exit and mining becomes more concentrated among well-capitalized operations with access to cheap power, the Bitcoin network becomes more resilient but potentially more geographically centralized.

Smaller independent miners and mid-sized operations face the most pressure in this environment. While the $45,000 mining cost threshold provides clarity on current network economics, future profitability will depend heavily on BTC price stability and the ability of miners to access increasingly competitive energy sources. The period ahead will likely determine which mining operations survive and which consolidate into larger industrial-scale enterprises.