JPMorgan analysts estimate that bitcoin’s production cost — often viewed as a soft price floor — has declined to $77,000 from $90,000 at the start of the year. The drop follows a recent fall in network hashrate and mining difficulty, which reduced operating costs for remaining miners.
Bitcoin Mining Difficulty Drops Sharply in 2026
The bank noted that bitcoin’s mining difficulty has fallen about 15% year to date, marking the steepest decline since China’s 2021 mining ban. Mining difficulty adjusts roughly every two weeks to maintain a 10-minute average block time, meaning a lower hashrate automatically leads to easier mining conditions.
Two key factors drove the decline. First, bitcoin’s price pullback earlier this year squeezed margins for high-cost miners, particularly those using older equipment or facing elevated energy costs. Second, severe winter storms in parts of the United States, including Texas, forced temporary shutdowns as power grids prioritized residential demand.
Miner Capitulation and Hashrate Recovery
Historically, sharp difficulty drops signal miner capitulation, often accompanied by increased bitcoin selling to cover operational expenses or reduce debt. Analysts said some higher-cost operators exited the market, stabilizing production costs. Early signs of hashrate recovery suggest mining difficulty — and production costs — could rise again at the next adjustment.
Institutional Flows to Drive Crypto in 2026
Despite recent volatility, JPMorgan remains constructive on digital assets in 2026. The bank expects institutional capital flows to strengthen, supported by clearer regulatory frameworks. Analysts reiterated a long-term bitcoin price target of $266,000, based on a volatility-adjusted comparison with gold, assuming sentiment improves and bitcoin regains appeal as a macro hedge.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.