Bitcoin’s 50% Plunge Puts Miners Under Severe Cost Pressure

Bitcoin’s latest drawdown has intensified stress across the mining sector, with prices now roughly 50% below October highs and recent trading below US$63,000 (AU$90,720). The decline has raised questions over whether current market levels are compatible with prevailing production costs.

A Checkonchain chart has added to those concerns by placing Bitcoin’s difficulty regression price around US$86,000 (AU$123,840), significantly above spot prices. The indicator has been cited as evidence that miners are operating deep below breakeven conditions.

That interpretation has been challenged by CryptoQuant’s Julio Moreno, who described the regression price as an indirect approximation rather than a measure of real-world costs. He emphasised that factors such as electricity pricing, hardware efficiency, and labour expenses are not reflected in the model. Moreno said more realistic estimates generally fall between US$70,000 (AU$100,800) and US$80,000 (AU$115,200), still leaving miners exposed at current prices.

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Not All Miners Face the Same Cost Reality

Cost pressures are unevenly distributed across the industry, with publicly traded miners often reporting lower median costs near US$60,000 (AU$86,400), while others face substantially higher production expenses. Some operators are therefore able to remain marginally profitable, while less efficient firms face mounting losses.

Structural changes in Bitcoin mining have amplified these risks, as rising hashrate has coincided with shrinking margins and weaker fee revenue. In several past cycles, similar conditions led to miner capitulation and consolidation as prices diverged from production costs. Until Bitcoin prices move back toward sustainable cost levels, the sector is likely to remain under prolonged financial strain.
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