BTC Mining Margins Compress to 4.9% as Network Hashrate Hits Record Levels
Bitcoin surged to $91,950 on Wednesday, even as new data highlighted that the market is sitting at a critical turning point. According to Capriole Investments, Bitcoin’s estimated production cost now stands near $83,873, while its electricity cost—the baseline energy input required for mining—remains lower at $67,099.
Bitcoin Trades Near Production Cost as Miner Profitability Compresses
The latest data reveals Bitcoin is trading only slightly above its miner production cost, raising concerns about tightening profitability across the mining sector.
The current BTC miner price is $87,979, leaving miners with a slim 4.9% margin—one of the lowest levels seen in the current market cycle. Historically, however, thin margins have acted as a stabilizing force, often triggering miner capitulation, a difficulty reset, and reduced sell pressure.
Miners have faced notable strain due to rising network competition. In October, Bitcoin’s hashrate reached an all-time high of 1.16 ZH/s, even as Bitcoin’s price dipped toward $81,000 in early November.
But stress accelerated on Nov. 25, when hash prices—revenue earned per unit of computing power—fell below $35 per hash, far under the $45/PH/s median earned by public miners. Mining rig payback periods have stretched beyond 1,200 days, while rising financing and borrowing costs add further pressure.
Although some firms are expanding into AI and high-power computing, revenue in these areas remains too small to meaningfully offset declining Bitcoin mining income.
Dynamic NVT Enters “Value Zone,” Suggesting Late-Stage Correction
Beyond mining data, Bitcoin’s Dynamic Range NVT ratio has dipped below its NVT Low value of 194, placing BTC into what analysts often describe as a “value zone.” A low NVT indicates that Bitcoin’s market cap is lagging behind on-chain transaction strength, a pattern typically associated with late correction stages rather than early downturns.
Historically, this setup has been constructive, though rarely the exact market bottom. Previous cycles show Bitcoin tends to form an initial low after the NVT drop, rebound, and then revisit lower levels before a stronger reversal.
If this pattern repeats, Bitcoin could see one more sweep below $80,000. Even so, the combination of compressed miner margins and a low Dynamic NVT suggests BTC may be deepening into a bottoming structure rather than entering a prolonged decline.
