Bitcoin has hit a new low, trading near $70,000 on February 5 – roughly 20% below its estimated production cost of around $87,000 per coin. This marks the lowest point in miner profitability in 14 months due to declining hashrate, shrinking margins, and broader market downturns.
Key factors contributing to this decline include:
1. **Declining hashrate**: The network’s hashrate has fallen by 12% from a peak of 1.1 zettahashes per second in October, with the current hashrate near 970 exahashes per second.
2. **Rising difficulty adjustment**: A expected difficulty adjustment on February 8 could cut mining difficulty by around 14%, potentially throwing a lifeline to struggling miners.
3. **Collapse of miner revenue**: Daily Bitcoin mining revenue plummeted from $45 million to $28 million in late January, driven by falling prices and winter storms forcing operators to reduce production.
The Miner Profit and Loss Sustainability Index has also fallen to 21, indicating that revenues are failing to cover costs for a significant portion of the network. This is the lowest level seen since November 2024.
Source: https://www.tradingview.com/news/cryptonews:0c619ac1c094b:0-bitcoin-trades-20-below-production-cost-as-miner-profitability-drops-to-14-month-low