According to a report released Wednesday by JPMorgan Chase Managing Director Nikolaos Panigirtzoglou and his team, the recent continued pressure on Bitcoin prices is mainly due to two factors: the recent decline in Bitcoin network hashrate and mining difficulty, and the latest developments surrounding Strategy.
Analysts say the decline in hashrate and mining difficulty reflects the combined effect of two forces: China reiterating its ban on Bitcoin mining after a surge in private mining activity, and lower Bitcoin prices and high energy costs squeezing profits, leading high-cost miners outside of China to exit the market.
While a drop in hashrate typically increases miners’ revenue, analysts say that “Bitcoin’s price continues to hover below its production costs,” putting selling pressure on the first and largest cryptocurrency.
JPMorgan analysts have now lowered their estimate of Bitcoin's production cost to $90,000, down from $94,000 last month. The analysts estimate this update is based on an electricity price assumption of $0.05 per kilowatt-hour; for high-cost producers, every $0.01 per kilowatt-hour increase would add $18,000 to their production costs.
A JPMorgan report stated, "Some high-cost miners have been forced to sell Bitcoin in recent weeks due to squeezed profits caused by rising electricity costs and falling Bitcoin prices."
Even so, analysts say miners are not the primary driver of Bitcoin's next move. Instead, they believe Strategy's balance sheet and its ability to avoid selling Bitcoin are the key factors. (The Block)
According to a report by CryptoQuant, an on-chain analytics firm, Michael Saylor's Bitcoin holding company, Strategy (MSTR), set up a $1.44 billion USD reserve this week, indicating that the company is preparing for a potential Bitcoin bear market.
CryptoQuant believes that establishing a 24-month dollar buffer marks a "tactical shift" for Strategy, moving from its past aggressive strategy of issuing new shares to buy Bitcoin to a more conservative, liquidity-focused approach. This reduces the risk of being forced to sell Bitcoin during market downturns. Julio Moreno, head of research at CryptoQuant, predicts that if the bear market continues, Bitcoin's price could trade between $70,000 and $55,000 next year.
Odaily Planet Daily reports that Bitcoin treasury company Strategy has announced its membership in the Open Semantic Interchange (OSI) standard. OSI is an industry-wide semantic interchange standard jointly developed by tech giants like Salesforce and Snowflake, aiming to solve enterprise data interoperability issues and achieve cross-platform data consistency through a unified semantic framework. Strategy will accelerate its open ecosystem strategy through its AI-driven general semantic layer, Strategy Mosaic. (Businesswire)
According to a Reuters report, Strategy (NASDAQ: MSTR), the world's largest corporate Bitcoin holder, is in talks with index provider MSCI about a possible removal from the MSCI USA and MSCI World indices.
MSCI is expected to make a decision on January 15, 2026. If the removal takes effect, it could trigger an outflow of up to $8.8 billion, especially funds held through passive investment vehicles such as ETFs.
Strategy Executive Chairman Michael Saylor stated that the company is involved in the relevant processes but expressed uncertainty regarding the scale of the capital outflow predicted by JP Morgan. Saylor also noted that the recent sharp decline in Bitcoin prices from their all-time high of $120,000 in October, coupled with the AI bubble and economic uncertainty, has put pressure on risk assets. Strategy's stock price has fallen by more than 37% this year.
Strategy, a digital asset financial reserve company, provides investors with exposure to risky assets by holding cryptocurrencies, but the recent market downturn may force similar companies to sell assets, further exacerbating downward pressure on prices.
According to Odaily Planet Daily, at Binance Blockchain Week, Strategy founder and executive chairman Michael Saylor delivered a speech on the theme of "Bitcoin = Digital Capital," stating that in the past year, in addition to the US government, large banks and corporations have also begun to embrace crypto. Today, 30% of US voters hold crypto assets, while the number of crypto users worldwide exceeds 700 million.
As the first digital asset treasury, Strategy has set an example, currently holding Bitcoin worth $59 billion. Compared to other global companies, it ranks fifth in terms of asset size, behind Berkshire Hathaway, Microsoft, Google, and Amazon. However, given time, we will become number one.
Because, in addition to the steady growth of BTC’s own value, Strategy also has an incredibly healthy capital structure – a corporate value of $68 billion, Bitcoin reserves of $59 billion, and an LTV (Loan to Value) of only 11%. Based on current financial data, the dividend margin is sufficient to cover the next 73 years.
Strategy's work includes creating currency, reducing risk, mitigating volatility, "purifying" returns, and shortening cycles... In short, it's about transforming digital capital into digital credit.
