Bitcoin's $85,000 Threshold: A Turning Point for Miners' Selling Pressure
JPMorgan analysts have stated that Bitcoin's price staying above its estimated production cost of around $85,000 could reduce the risk of forced sales by miners.
This threshold is significant because it represents the average cost of producing one Bitcoin. When prices stay below this level for an extended period, some miners may operate at a loss and sell more Bitcoin to cover expenses or exit the market.
According to JPMorgan, during the prolonged period of low profitability, miners have taken steps such as moving their machines to regions with cheaper electricity, selling older equipment, and mothballing some machines. This has led to a decline in the network's total computing power and mining difficulty, down 19% and 15%, respectively.
The shift towards AI computing may also contribute to slower growth of computing power on the Bitcoin network. JPMorgan notes that publicly traded companies' share of mining activity is declining in favor of private companies and state-linked miners.