Bitcoin’s Break With Tech Widens as Strategy’s Sale Feeds Rout

Summary

Jim Ferraioli from Charles Schwab discusses Bitcoin's recent selloff, the modest scale of the current drawdown relative to historical bear markets, and the role of miner production costs as a price floor. He also explains how Bitcoin miners are increasingly pivoting to AI inference, which provides a more stable revenue stream and could benefit the mining industry long-term.

• Bitcoin has fallen roughly 50% from its peak, a relatively modest decline compared to past 75%+ corrections.
• The average cost basis for Bitcoin ETF holders is around $83,000, and for active investors it is about $78,000.
• Most selling is coming from recent buyers who acquired Bitcoin in the past 1.5 years.
• The most efficient Bitcoin miners produce Bitcoin at roughly $60,000 per coin, and historically that cost has acted as a price bottom.
• Average miner production cost is $95,000, causing less efficient miners to shut down when prices drop.
• Bitcoin miners are pivoting some operations to AI inference, which offers more stable and higher revenue per megawatt hour.
• The pivot to AI is seen as a long-term positive for the mining industry, even though inference demand is concentrated during business hours.
• The crypto investor base remains predominantly retail, with some hedge fund participation mainly through market-neutral basis trades.