Bitcoin Magazine
Schwab Strategist: Bitcoin’s $60,000 Mining Cost Could Mark the Cycle Bottom
Bitcoin is in a bear market. That much is not in dispute.
What Jim Ferraioli, Director of Digital Currencies Research and Strategy at Charles Schwab, argued Wednesday on Bloomberg is more precise and more structural: this selloff has a measurable cost floor, and that floor is built not from sentiment or chart patterns, but from the physics of energy consumption.
The numbers frame the drawdown in context. Bitcoin peaked at $126,000 in the fall before collapsing to roughly $60,000 in February — a 50% correction that, while brutal for recent buyers, falls far short of the 75%-plus implosions that defined prior Bitcoin bear markets.
Ferraioli’s core analytical framework centers on one question: what does it cost to manufacture Bitcoin? The answer creates a natural gravitational floor that has held across multiple cycles.
For the most efficient miners — those operating at scale with next-generation ASIC hardware and access to the cheapest wholesale energy — the cost to produce one Bitcoin sits at approximately $60,000, Ferraioli said.
That figure is not arbitrary. It represents the all-in expense of powering a facility at roughly $0.07 per kilowatt-hour with the most advanced semiconductor fleets available.
The less efficient miners — those with older ASIC hardware, higher energy costs, and thinner operational margins — carry a production cost of approximately $95,000 per BTC, according to Glassnode data cited in Schwab’s May 2026 research report. That gap between $60,000 and $95,000 defines Bitcoin’s current valuation range.
Bitcoin’s energy floor: Why $60,000 may mark the bottom
Ferraioli argues that in deep bear markets, the cost of production for the best miners has historically served as the bottom. February’s low near $60,000 aligns almost precisely with that level, as well as BTC’s 200-week moving average.
The BTC selling pressure is not random. It is demographically specific. The investors driving forced liquidations are those who acquired Bitcoin during the past 18 months — buyers who rode the asset from sub-$80,000 up to $126,000 and then watched gains evaporate in full.
Schwab tracks two cost-basis metrics to quantify this pressure: the average acquisition cost for U.S. spot ETF and ETP holders, which stands near $83,000, and the active investor cost basis — excluding coins rewarded to miners — which sits near $78,000.
Both figures sit well above current spot prices, putting the majority of recent entrants into unrealized loss positions and reinforcing $83,000 as a ceiling of overhead supply rather than a floor of support.
Glassnode’s on-chain data corroborates this dynamic. Bitcoin’s latest attempted rally stalled at the aggregate ETF cost basis near $83,000, with total realized losses spiking to $1.35 billion per day and long-term holders capitulating from cycle-top