Bitcoin fell to around $70,000 on February 5 – about 20% below the estimated cost of $87,000 to produce one coin – as the hashrate declines, margins shrink and the market as a whole deteriorates, pushing miner profitability to its lowest level in 14 months.
Key points:
Bitcoin is trading at nearly $71,000, about 20% below its estimated full cost of production – a gap that historically only appears during bear markets.
The Miner P&L Sustainability Index fell to 21, a level not seen since November 2024, after daily mining revenues briefly reached $28 million.
– The difficulty adjustment on February 8 is expected to reduce mining difficulty by approximately 14%, giving an opportunity to operators who are still using machines.
The data indicates CryptoQuant The network’s hash rate is near 970 exahashes per second, down 12% from a peak of around 1.1 exahashes per second in October – the biggest drop since China’s 2021 mining ban.
This decline dates back to early October, when Bitcoin was trading at nearly $126,000. The largest futures liquidation event on record triggered a massive sell-off that continued without finding a floor. CryptoQuant’s Bull Score has since fallen to zero.
Miner revenue plummets as block times exceed target
The financial pressure on miners has increased significantly in recent weeks. Daily revenue from Bitcoin mining fell from around $45 million to an annual low of $28 million in late January, due to falling prices and severe winter storms in the United States that forced major operators to reduce production.
Production at the two largest publicly traded miners fell from around 77 bitcoins per day to just 28 during the same period, according to CryptoQuant.
The average block time increased to around 11.6 minutes, well above the 10 minute target set by the protocol, reflecting the amount of hashing power that stopped working.
The Miner P&L Sustainability Index fell to 21, confirming that revenues are failing to cover costs for much of the network. Older models, including the Antminer S19 XP+ and MicroBT M60S, are no longer profitable given current mining difficulties and standard electricity rates of $0.08 per kilowatt hour.
Even the newer S21 series devices are getting closer to the $69,000-$74,000 closing price range as previously reported.
Difficulty adjustment expected to result in biggest reduction since 2021
Bitcoin’s next difficulty adjustment, expected on February 8, is expected to reduce mining difficulties by about 14% to around 121 trillion, down from the current level of 141.67 trillion.
If confirmed, this would be the largest negative adjustment since mid-2021 and would immediately improve revenue per unit of computing power for miners still connected to the network.
Van Eck, the digital asset investment firm, argued that persistent hashrate declines have historically acted as reversal indicators. The company’s data shows that negative 90-day hash rate growth was followed by positive 180-day returns for Bitcoin 77% of the time, with an average gain of 72%.
“When hash rate pressure persists for longer periods of time, future positive returns tend to occur more frequently and with greater magnitude,” Van Eck analysts Matt Siegel and Patrick Busch wrote in a December research note.
The shift toward artificial intelligence and the decline of institutions add layers of uncertainty
Part of the hashrate decline could be structural rather than cyclical. As reported earlier this year, some miners, including IREN and Core Scientific, have shifted their capabilities toward artificial intelligence and high-performance computing workloads, which provide more stable returns from block rewards in the current spread environment.
Van Eck estimated that up to 10% of Bitcoin’s hash rate could be permanently redirected to artificial intelligence.
At the same time, institutional orders were reflected in Bitcoin spot funds in the United States. Research data shows that ETFs became net sellers in early 2026, selling around 10,600 BTC year-to-date, compared to around 46,000 BTC purchased during the same period in 2025.
The article Bitcoin Trades 20% Below Cost of Production as Miner Profitability Falls to 14-Month Low appeared first on Cryptonews Arabic.
