Bitcoin in Bear market. This is not in dispute.
What Jim Ferraioli, Director of Cryptocurrency Research and Strategy at Charles Schwab, said: Argue Wednesday in Bloomberg is more nuanced and more structured: These sell-offs have a measurable cost floor, and this floor is not built from sentiment or chart patterns, but from the physics of energy consumption.
The numbers frame the clouds in context. Bitcoin He reached his peak at $126,000 in the fall before collapsing to nearly $60,000 in February — a 50% correction, which, while brutal for new buyers, is far less than the 75%-plus implodes that have defined previous Bitcoin bear markets.
Fraioli’s basic analytical framework focuses on one question: How much does it cost to manufacture Bitcoin? The answer creates a natural gravitational floor that has remained constant over multiple cycles.
For the most efficient miners — those who operate at scale with next-generation ASIC hardware and access to the cheapest wholesale power — the cost of producing one bitcoin is about $60,000, Ferraioli said.
This number is not arbitrary. It represents an all-in cost of operating the facility of approximately $0.07 per kilowatt-hour using the most advanced semiconductor fleets available.
Less efficient miners — those with older ASIC hardware, higher energy costs, and lower operating margins — incur a production cost of about $95,000 per BTC, according to Glassnode data cited in a May 2026 Schwab report. Research report. This gap between $60,000 and $95,000 defines Bitcoin’s current valuation range.
Bitcoin Power Floor: Why $60K May Mark the Bottom
In deep bear markets, the cost of production for the best miners has historically been the bottom, Ferraioli says. The February low near $60,000 roughly corresponds to this level, as well as BTC’s 200-week moving average.
Bitcoin selling pressure is not random. It is demographically specific. The investors driving the forced liquidations are those who have acquired Bitcoin within the past 18 months — buyers who invested the asset from less than $80,000 to $126,000 and then watched the gains completely evaporate.
Schwab tracks two cost bases Metrics To measure this pressure: the average acquisition cost for holders of U.S. ETFs and ETFs, which is about $83,000, and an active investor’s cost basis — excluding coin equivalents for miners — which is closer to $78,000.
Both numbers are well above current spot prices, putting the majority of new entrants in unrealized loss positions and reinforcing $83,000 as a ceiling for public supply rather than a support floor.
Glassnode exists on the chain Data confirms this dynamic. Bitcoin’s latest rally stalled at a total cost of ETFs near $83,000, with total realized losses rising to $1.35 billion per day and long-term holders capitulating from the top of the cycle positions. Hedge funds account for roughly 30% of spot ETP ownership but operate market neutral, executing fundamental trades rather than taking directional views – meaning they make no natural exposure when prices fall.
Here Ferraioli’s analysis turns into constructive analysis. Every major publicly traded Bitcoin miner has announced its pivot to high-performance computing (HPC) for AI inference workloads. On the face of it, the economics seem to favor abandoning mining: the inference generates higher net revenues per megawatt-hour than Bitcoin mining during periods of peak demand.
But the demand for AI inferences is not uniform 24 hours a day. Models work hard during business hours and remain idle throughout the night and on weekends.
This creates a structural opportunity that does not replace Bitcoin mining, but rather is in addition to it. Schwab’s analysis depicts Bitcoin as an optimal means of monetizing energy during off-peak hours, with the inference being during peak demand in business hours.
A data center running this hybrid model maximizes utilization across a full 24-hour cycle rather than leaving capacity dark when inference demand declines. For miners, this translates into more stable revenues, fewer forced Bitcoin sales to cover operating costs, and less structural risk across bear market cycles.
Bitcoin is powered by energy
The basic thesis is one of energy economics. Bitcoin He has no profitsThere is no free cash flow, and the CEO is not issuing guidance. Its value, in Ferraioli’s framework, derives from the cost of the energy required to produce it – a cost that is transparent, verifiable, and historically durable.
In commodity markets, the price cannot sustainably trade below the cost of production. Producers closed their doors, supply contracts, and the balance was restored to the upside.
Bitcoin follows the same logic: when spot prices fall toward $60,000, less efficient miners stop operations, the network hash rate is adjusted by Bitcoin’s difficulty mechanism, and the cost of producing each new coin decreases.
As of May 2026, the average cost of mining Defeat Bitcoin miners are all positioned near $85,604, with the price of Bitcoin trading in the mid-$60,000s – meaning the network as a whole is operating at a loss, a configuration that has historically preceded recoveries, not further collapses.
