Bitcoin Trades 20% Below Production Cost as Miner Profitability Drops to 14-Month Low

Bitcoin has slipped to roughly $70,000 on February 5 — about 20% beneath the estimated $87,000 value to produce a single coin — as hashrate declines, shrinking margins, and a broader market rout drag miner profitability to its lowest level in 14 months.

CryptoQuant knowledge places the community hashrate close to 970 exahashes per second, down 12% from a peak of roughly 1.1 zettahashes per second in October — the steepest slide since China’s 2021 mining ban.

The downturn traces again to early October, when Bitcoin was buying and selling close to $126,000. The largest derivatives liquidation event on record kicked off a sell-off that has but to discover a flooring. CryptoQuant’s Bull Score Index has since fallen to zero.

Miner Revenue Collapses as Block Times Drift Above Target

The monetary pressure on miners has intensified sharply in current weeks. Daily Bitcoin mining income plunged from roughly $45 million to a yearly low of $28 million in late January, pushed by a mixture of falling costs and extreme US winter storms that pressured giant operators to curtail manufacturing.

Output from the biggest publicly traded miners dropped from roughly 77 Bitcoin per day to simply 28 over the identical interval, in accordance to CryptoQuant.

Average block occasions have drifted to roughly 11.6 minutes, effectively above the protocol’s 10-minute goal, reflecting the quantity of hashpower that has gone offline.

The Miner Profit and Loss Sustainability Index has slid to 21, confirming that revenues are failing to cowl prices for a good portion of the community. Older fashions, together with the Antminer S19 XP+ and MicroBT M60S, are no longer profitable at present problem and normal electrical energy charges of $0.08 per kilowatt-hour.

Even newer S21-series machines are approaching their shutdown worth vary of $69,000 to $74,000, as previously reported.

Difficulty Adjustment Expected to Deliver Sharpest Cut Since 2021

The subsequent Bitcoin problem retarget, projected for February 8, is estimated to reduce mining problem by roughly 14% to round 121 trillion, down from the present 141.67 trillion.

If confirmed, it will mark the biggest single unfavourable adjustment since mid-2021 and would instantly enhance income per unit of computing energy for miners that stay on-line.

VanEck, the digital belongings funding agency, has argued that sustained hashrate declines have traditionally functioned as contrarian indicators. The agency’s knowledge reveals that unfavourable 90-day hashrate progress has been adopted by optimistic 180-day Bitcoin returns 77% of the time, with a median acquire of 72%.

“When hash price compression persists over longer durations, optimistic ahead returns have a tendency to happen extra usually and with better magnitude,” VanEck analysts Matt Sigel and Patrick Bush wrote in a December research note.

AI Pivot and Institutional Retreat Add Layers of Uncertainty

Part of the hashrate decline could also be structural moderately than cyclical. As covered earlier this year, miners together with IREN and Core Scientific, have been redirecting capability towards synthetic intelligence and high-performance computing workloads, which supply steadier returns than block rewards within the present margin atmosphere.

VanEck estimated that as a lot as 10% of Bitcoin’s hashrate may ultimately shift towards AI completely.

Meanwhile, institutional demand by means of US spot Bitcoin ETFs has reversed. Research knowledge reveals ETFs have become net sellers in early 2026, offloading roughly 10,600 BTC year-to-date in contrast with purchases of about 46,000 BTC over the identical interval in 2025.

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