Bitcoin’s price crashed below $63,000, potentially sinking below the estimated cost for many miners to produce the digital asset. Analyst estimates place average mining costs between $60,000 and $80,000, with specific public companies like Iris Energy and NYDIG showing a wide range from $39,208 to over $106,000 per Bitcoin. The sharp decline has triggered over $2 billion in crypto liquidations in the past day.
Bitcoin plunged below $63,000, a 50% drop from its October peak, which could push its price below the production cost for some miners. A widely shared chart from Checkonchain suggested a difficulty regression price of $86,000, but analysts caution this is an indirect estimate.
Julio Moreno of CryptoQuant noted that chart is “an indirect estimation of mining costs based on a regression of price and mining difficulty—not a direct estimate from actual electricity costs, hardware efficiency, labor cost, etc.” He stated actual estimates range between $70,000 and $80,000, still above the current trading price.
Calculating the implied cost of Bitcoin production for publicly traded miners is more precise according to Nishant Sharma of BlocksBridge Consulting. He explained, “In practice, there is no single cost of production because miners’ economics vary widely by power price, uptime, ASIC mix, curtailment programs, and financing.” The current median cost for public miners is estimated at $60,000, below Bitcoin’s price.
Specific public miners show extreme cost variations based on their operations and energy deals. Iris Energy, leveraging hydropower and wind turbines, has the lowest implied cost at $39,208 per Bitcoin mined. Conversely, NYDIG, which has been expanding via acquisitions, has the highest cost at over $106,000.
Should prices fall near production costs, Sharma anticipates high-cost miners curtailing operations and hash rate growth slowing. The market is also facing a significant mining difficulty adjustment, estimated by Coinwarz to drop by 13% this weekend.
The price crash has led to massive liquidations in the crypto derivatives market. According to CoinGlass data, over $2 billion worth of contracts were liquidated in 24 hours, with Bitcoin derivatives alone accounting for $1.11 billion. The single largest liquidation was a $12 million Bitcoin contract on Binance.
