The mining economics of the first cryptocurrency have deteriorated this year. Bitcoin has been trading below the cost of production for five months already, The Block writes, citing JPMorgan.

The bank's experts estimated the average cost of mining a single coin at $78,000. At the asset's current price, roughly 20% of miners are operating at a loss.

The network's hashrate and difficulty have begun reacting more strongly to price swings. Over the past six months, the correlation between difficulty and price has risen to 0.62. This means that miners more often switch off their equipment during market drawdowns. In early June, mining difficulty fell by 10%.

Public mining companies have begun actively selling off their reserves. In the first quarter, they sold more than 32,000 BTC to cover operating expenses. That exceeds their total sales for the whole of last year.

Pressure on the industry will persist as long as bitcoin trades below $78,000. However, JPMorgan analysts consider the current pessimism in the market a possible signal of future growth.

As a reminder, in June on-chain data pointed to miner capitulation. 

Source: ForkLog