JPMorgan has lowered its estimate of bitcoin’s production cost to $77,000, down from roughly $90,000 at the start of the year. Analysts at the bank said the revision reflects lower mining difficulty and a weaker network hashrate, while continuing to treat production cost as a soft floor for bitcoin’s price.
The view came from analysts led by Nikolaos Panigirtzoglou. Their report said lower bitcoin prices made operations unprofitable for higher-cost miners, especially those using older machines or paying expensive power rates. Weather also added pressure. Severe winter storms in the United States disrupted mining activity, and grid operators in Texas temporarily curtailed electricity supply, forcing large facilities offline.
Difficulty relief favored efficient miners after weaker operators exited
According to JPMorgan, falling difficulty provided relief for efficient mining operators. With fewer competitors on the network, the probability of earning block rewards per unit of hashpower improved, allowing stronger participants to absorb market share left behind by weaker miners. That shift helped keep production costs from entering a prolonged downward spiral.
The report also said some higher-cost miners in the current cycle have sold bitcoin holdings to fund operations, cut debt, or move toward artificial intelligence infrastructure. Miner selling, in that sense, was tied to balance sheet pressure and capital reallocation rather than a single market factor.
Next network adjustment could bring higher difficulty again
JPMorgan said the network hashrate has already started to recover. If that recovery continues, mining difficulty and bitcoin production cost could both move higher at the next adjustment cycle. Sharp drops in difficulty have often appeared during miner capitulation phases. During China’s mining ban in 2021, difficulty fell by about 45% between May and July, before recovering later that year as mining activity relocated and infrastructure was rebuilt across jurisdictions.
Bank keeps a positive 2026 view on digital assets
Outside mining data, JPMorgan remains constructive on crypto markets in 2026, pointing to stronger expected flows from institutional investors. In a separate outlook, the bank said future participation should be driven more by institutions than by retail demand. It also said added regulatory clarity, including the proposed Clarity Act in the United States, could reinforce that direction.
JPMorgan also reiterated its long-term bitcoin target of $266,000. That forecast is based on a volatility-adjusted valuation comparison between bitcoin and gold, with the assumption that sentiment shifts and bitcoin moves closer to gold’s standing as a defensive asset.
Intraday price action showed how fragile liquidity remained. Bitcoin briefly printed a marginal high near $68,500 before reversing sharply and dropping toward $65,200. The report said the move looked more consistent with forced liquidations than orderly profit-taking, and added that failure to hold above $66,500 leaves lower liquidity pockets exposed.