The value of Bitcoin has dropped by half since its peak in October, and it may soon fall below the cost some miners incur to produce it, if that hasn’t happened already.
Bitcoin’s price recently dipped 14% within a day, falling under $63,000. A chart from the analysis platform Checkonchain circulating on X highlights the Bitcoin difficulty regression price at around $86,000—significantly higher than where Bitcoin is currently trading.
However, Julio Moreno, head of research at CryptoQuant, warns that this figure can be misleading when used as an estimate for average mining costs.
“The chart provides an indirect approximation based on a regression between price and mining difficulty rather than direct calculations involving electricity expenses, hardware efficiency or labor costs,” he explained.
Moreno noted that other estimates place mining costs between $70,000 and $80,000 per Bitcoin. Although slightly lower than the chart’s number, these figures still exceed today’s market price for Bitcoin.
Nishant Sharma from BlocksBridge Consulting shared with Decrypt that calculating implied production costs is relatively straightforward for publicly traded miners who disclose their data in quarterly reports.
“There isn’t one definitive production cost because factors like power prices, operational uptime, hardware types (ASICs), curtailment policies and financing vary widely among miners,” Sharma said.
Larger public mining companies typically benefit from economies of scale resulting in lower production expenses. Currently though, BlocksBridge estimates a median cost near $60K per Bitcoin mined—below current market prices but close enough to cause concern among some operators.
The firm NYDIG reportedly faces the highest implied expense exceeding $106K per mined BTC due to its expansion strategy through acquisitions. Conversely Iris Energy benefits from access to renewable energy sources such as hydropower and wind turbines allowing them to mine at just over $39K per coin—the lowest recorded cost among major players.
This data reflects Q3 earnings reports while investors await updated results expected later this month when industry giants Riot Platforms and MARA Holdings release their Q4 financials.
Despite differences in exact numbers—with both Sharma and Moreno agreeing real miner costs are below the cited $86K—the steep decline signals many miners could soon confront critical profitability challenges if prices don’t rebound swiftly enough.
If cryptocurrency values approach or dip beneath production thresholds as they have now been doing lately:
- “</span;High-cost operations tend to reduce output or shut down entirely,“</span; Sharma explained;
- “</span;Growth rates of network hash power slow down;“
- “</span;Market consolidation occurs with financially stronger firms acquiring assets from distressed competitors.“
An upcoming adjustment in Bitcoin’s mining difficulty is anticipated around February 7th which Coinwarz forecasts will reduce difficulty by approximately 13%, potentially easing pressure on struggling miners temporarily.
At writing time today bitcoin was trading near $62, 510 after dropping roughly 4% within one hour—and overall more than 25% lower compared with last week according to CoinGecko data. This marks a sharp reversal since October when BTC topped above $126, 000.
This rapid downturn has triggered liquidations exceeding two billion dollars across crypto derivatives markets tracked by analytics provider CoinGlass—with bitcoin contracts alone accounting for over one billion dollars worth being forcibly closed out. The largest single liquidation involved a twelve million dollar position on Binance exchange alone.