Bitcoin Miner Operating Cost Crisis: Price Decline Signals from the Cold Storage Perspective

Bitcoin mining economy metrics indicate significant financial pressure on miners, with strong signs that many are considering shutting down or relocating their operations. According to Capriole Investments, a hedge fund specializing in digital assets, the average cost to execute one Bitcoin has reached a level challenging for short-term profitability. Currently, Bitcoin is trading around $69,580, well below the $82,500 level recorded last January.

Economic Pressure Disrupts Mining Profitability

Based on data from Capriole Investments, the pure electricity cost to mine one Bitcoin is approximately $59,450, while total production expenses reach $74,300. This significant difference creates a “danger zone” for operators with thin profit margins. Although Bitcoin’s price remains above both thresholds, many miners with higher cost structures—including those operating in regions with premium energy rates or running cold facilities with high cooling costs—are under pressure to reduce capacity or temporarily shut down.

Why Miners Are Leaving Operational Facilities

Charles Edwards, founder of Capriole Investments, explains that the market has considerable room for further decline before a severe financial crisis occurs. However, the economic decisions of individual miners do not always wait for industry lows. Several factors are causing active miners to shift resources away from traditional mining operations:

• Reallocation of capital to AI: Some miners have shifted computational assets to support more profitable artificial intelligence operations
• Operational space costs: Cooling facilities for mining operations require ongoing investments that are becoming increasingly inefficient as profit margins shrink
• Impact of extreme weather: Winter storms in key regions have disrupted energy supplies and increased operational costs

Bitcoin’s hash rate dropped to mid-2025 levels by the end of January, reflecting some miners exiting the network. This phenomenon directly indicates an ongoing “miner exodus.”

Network Automatic Mechanisms Balance Pressure

When miners cease operations, Bitcoin’s network adjustment mechanism automatically lowers mining difficulty, making remaining operations more economical and cheaper. This system is designed to maintain long-term network stability regardless of short-term volatility in miner participation.

Jeff Feng, one of the founders of Sei Labs, emphasizes that Bitcoin has historically rebounded strongly after periods of miner pressure. The 2021 period provides concrete evidence: after China’s mining ban, the hash rate dropped about 50%, and Bitcoin’s price fell from around $64,000 to $29,000. Nevertheless, within five months, the price recovered to $69,000, demonstrating a consistent resilience pattern.

Price Projection Based on Energy Value

As of February 9, 2026, the fair value of Bitcoin based on energy metrics is estimated at around $120,950—well above the current market price. This metric calculates Bitcoin’s intrinsic value using energy input and network production costs, suggesting substantial undervaluation potential.

Historical analysis shows Bitcoin tends to converge back toward its energy value after prolonged downturns. Under this scenario, price declines could continue toward the range of $59,450 to $74,300—cost thresholds described earlier. Each time the price hits these levels and then rebounds, mean-reversion momentum could trigger a move back toward the much higher energy value, creating a cycle that benefits long-term holders.

In conclusion, the economic pressures on mining operations present short-term challenges but do not yet signal long-term concerns. Instead, these declines can be viewed as a market cleansing phase that will strengthen the position of more efficient miners ready for the next rebound.