Bitcoin traded near $61,000 on Wednesday, falling below its estimated production cost as investors awaited a U.S. inflation report expected to show another increase in prices. Economists forecast annual inflation of 4.2%, while further price pressure could deepen Bitcoin’s latest market decline.
Capriole Investments founder Charles Edwards placed Bitcoin’s production cost at $62,650. The indicator estimates the average daily dollar cost of producing one Bitcoin across the global mining industry. Bitcoin relies on proof-of-work, which requires miners to compete with computing power when validating transactions and adding blocks. Electricity represents the main operating expense for large mining facilities.
With Bitcoin trading below the production-cost estimate, average miners face tighter margins. Edwards said the range between production cost and the $50,000 electrical cost has historically provided the best long-term value opportunities.
Bitcoin’s hashrate stood near 837 exahashes per second, showing less computing power connected to the network. During May, the measure repeatedly reached approximately 1,000 EH/s. Those May readings stood more than 19% above the latest level. The decline may suggest some miners disconnected equipment as Bitcoin prices weakened and operating margins narrowed.
The Bureau of Labor Statistics will release the May Consumer Price Index report at 8:30 a.m. ET. Economists expect annual headline inflation to rise from 3.8% in April to 4.2%. Prediction-market traders also favored a 4.2% reading, while 4.3% ranked as the next most likely outcome. Meanwhile, traders expected monthly core inflation to increase by either 0.2% or 0.3%.
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April’s CPI report showed annual inflation of 3.8%, exceeding market expectations. Bitcoin later fell nearly 28%, moving from approximately $82,000 toward $60,000 within three weeks. At the same time, rising energy prices have added to inflation concerns, as higher fuel costs increase transport and production costs. Middle East tensions have contributed to stronger oil prices.
President Donald Trump said negotiations with Iran had entered their 'final throes.' He also said an agreement could arrive within two or three days. A reduction in regional tensions could lower oil prices and ease future inflation pressure. Lower inflation could improve liquidity expectations and support demand for risk assets, including cryptocurrencies.
Bitcoin is trading below its estimated mining cost as traders wait for the U.S. CPI report. A hotter inflation reading could deepen the drop and strain miners further, while a softer result may support risk assets. The next inflation print could shape Bitcoin’s near-term direction.