Bitcoin Clears Production Cost Threshold, Could Eased Miner Selling Pressure

JPMorgan analysts have found that Bitcoin's move above $85,000 production cost could ease miner selling pressure if sustained.

The team, led by Nikolaos Panigirtzoglou, notes that a 280-day stretch below the estimated average production cost is a historical 'soft floor' for the price, not a hard floor.

When Bitcoin trades below production cost for an extended period, higher-cost miners can become unprofitable and respond by selling more Bitcoin, shutting down machines, or leaving the market.

The analysts argue that this adjustment mechanism still applies today, even though the mining industry is now larger and more industrialised than it was in 2018.

JPMorgan's bottom line is conditional: a sustained move above production cost should relieve miners and reduce the risk of forced selling. However, if Bitcoin falls back below $85,000 long enough to push higher-cost operators back into the unprofitable bucket, this relief thesis would be invalidated.