In a note released Friday, JPMorgan strategists reported that exchange-traded miners, who make up about 20% of total miners, will sell Bitcoin in May and June to increase liquidity, cover costs and possibly increase leverage. In the published note, it was also stated that private miners that are not listed on the exchange may have already sold most of their block rewards from their mining activities to cover ongoing costs and may be less leveraged due to their more limited access to capital markets.

If miners' profitability does not improve, they may continue to sell Bitcoin until Q3 to cover the increased operational costs. Because of these sales, there has been a serious pressure on the price of Bitcoin.

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Bitcoin, the largest cryptocurrency, has dropped more than 50% since the Fed started raising interest rates amid high inflation. Not only that, of course. The collapse of the $ 60 billion Terra ecosystem, financial crises in companies such as Three Arrows Capital and Celsius also had an impact on the Bitcoin price and increased market concerns.

Since many funds, loan platforms and DeFi projects in the crypto market are somehow connected with each other, a problem in one can have a knock-on effect and affect the entire market. This chain reaction also puts serious pressure on Bitcoin miners to sell their Bitcoins.

According to JPMorgan, the only thing that can alleviate price pressures is lower production costs. It seems that Bitcoin miners will not be able to rest without the costs falling.

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The costs of Bitcoin mining can of course differ depending on many variables. In a country like the USA, when we factor in the average electricity prices and the costs of new mining devices, the production cost for a large mining company is about $8,000 per Bitcoin. In other words, the cost of extracting 1 Bitcoin is about $ 8000. But taking into account overhead costs along with infrastructure and interest rates, it is said that the total costs of some miners could already be over $20,000.

Experts say that being in the mining business is very stressful in such a market, in an environment where more than 50% loss is experienced. Kazakh mining company Xive announced that it was shutting down its unprofitable devices as Bitcoin fell below $25,000.