Bitcoin Mining Sector Growing More Exposed to Price Volatility, JPMorgan Warns

A rising portion of bitcoin miners are now operating close to breakeven, making overall network activity — including hashrate and mining difficulty — more sensitive to price changes, according to JPMorgan.

The bank noted that bitcoin’s mining network has become increasingly reactive to market movements as margins tighten across the sector. This year, both hashrate and mining difficulty have shown a stronger correlation with BTC price swings. Over the past six months, the beta of mining difficulty relative to bitcoin’s price has risen to 0.62, indicating that network computing power is adjusting more rapidly to shifting market conditions.

“Mining economics have deteriorated this year, with bitcoin trading below its estimated production cost for five consecutive months,” analysts led by Nikolaos Panigirtzoglou wrote in a report last week.

Hashrate represents the total computational power used to secure and process transactions on a proof-of-work blockchain and is measured in exahashes per second.

The analysts added that more miners are now operating near their cost of production, leaving the network’s aggregate hashrate increasingly exposed to price volatility.

According to JPMorgan, mining conditions have worsened in 2026, with bitcoin remaining below its production cost for an extended period. Citing data from CoinShares’ first-quarter mining report, the bank estimates that around 20% of miners are currently unprofitable.

Financial strain has pushed miners to liquidate more of their bitcoin holdings. Publicly listed mining firms sold over 32,000 BTC in the first quarter alone — surpassing their total sales for all of 2025.

As a result, even modest price fluctuations are having a greater impact on network dynamics. When bitcoin trades below production costs, higher-cost miners often power down equipment, leading to declines in hashrate and downward adjustments in mining difficulty. JPMorgan highlighted the second week of June, when mining difficulty dropped by 10% — the second such decline this year.

Looking ahead, analysts expect this heightened sensitivity to persist as long as bitcoin remains below its estimated production cost, which JPMorgan currently places at around $78,000. At the time of writing, bitcoin was trading near $64,700.

Amid tightening margins, miners are increasingly exploring diversification into artificial intelligence (AI) and high-performance computing (HPC).

The rationale is clear: AI hosting agreements can deliver more stable, long-term revenue streams and potentially higher margins compared to the volatile economics of bitcoin mining, which have been pressured by rising competition and the 2024 halving.

Analysts estimate that miners have already announced tens of billions of dollars in AI and HPC-related initiatives, though execution challenges and the substantial capital required to build AI-ready infrastructure remain key hurdles.