Schwab Strategist: Bitcoin's $60,000 Mining Cost Could Mark the Cycle Bottom
A Schwab strategist says Bitcoin may have found a bottom near $60,000, where efficient miners' production costs line up with the market low.
Intelligence analysis by GPT-5.4 Mini
Jim Ferraioli argues that Bitcoin’s February low near $60,000 lines up with the estimated cost to produce BTC for the most efficient miners, creating an energy-based floor. Schwab also says many recent buyers remain underwater, with ETF and active-investor cost bases well above spot.
A Schwab analyst says Bitcoin may have fallen to the price where the best miners can still make it for about the same cost. It is like a factory setting the floor for a toy because making it costs around that amount.
Analysis
Energy floor
Charles Schwab’s Jim Ferraioli argues that Bitcoin’s latest selloff may have a measurable floor near $60,000, because that level roughly matches the production cost of the most efficient miners. In his framing, Bitcoin is not just falling on sentiment; it is gravitating toward a price where the cheapest producers can still operate.
The article says Bitcoin peaked at $126,000 in the fall before dropping to about $60,000 in February, which the author describes as a 50% correction. Ferraioli contrasts that move with previous bear markets, which were much deeper. He also points out that the low near $60,000 lined up with Bitcoin’s 200-week moving average, adding another layer of support in the analysis.
Who is under pressure
Schwab’s research looks at recent buyers as the main source of forced selling. The average acquisition cost for U.S. spot ETF and ETP holders is cited at about $83,000, while the active investor cost basis is near $78,000. Because both levels are above the current market price, many recent entrants are sitting on unrealized losses. The article says that helps turn $83,000 into overhead supply rather than support.
Glassnode data cited in the piece reinforces that view. It says Bitcoin’s rally stalled around the ETF cost basis near $83,000, while realized losses climbed to $1.35 billion per day and some long-term holders capitulated from cycle-top positions. Hedge funds are described as making up about 30% of spot ETP ownership, but mostly through market-neutral basis trades, which means they are not providing a directional bid when prices fall.
Miner economics and AI
The more constructive part of the thesis is that miners are increasingly moving into high-performance computing and AI inference. Schwab’s analysis suggests a hybrid setup could let data centers use Bitcoin mining as a baseload use for power during off-peak hours, while AI inference fills the busier daytime windows. That could improve utilization and reduce pressure on miners to sell BTC just to cover costs.
The article’s broader argument is simple: Bitcoin’s value is being framed as a function of energy economics, and in that model, price should not sustainably stay far below the cost of production for the strongest miners.
Key points
- Schwab strategist Jim Ferraioli says Bitcoin may have bottomed near $60,000, a level that matches the estimated cost of production for the most efficient miners.
- The article says Bitcoin fell from a $126,000 peak to about $60,000, a 50% drawdown that is smaller than prior bear markets.
- Schwab cites ETF and ETP holder cost basis near $83,000 and active investor cost basis near $78,000, leaving many recent buyers in loss positions.
- Glassnode data in the article says realized losses spiked and long-term holders capitulated, while hedge funds mostly trade Bitcoin market-neutrally.
- The piece argues that miners adding AI inference could make hybrid power use more efficient and reduce structural selling pressure.
- The broader thesis is that Bitcoin’s floor may be shaped by energy economics and production cost rather than sentiment alone.
If the $60,000 production-cost floor holds, Bitcoin could keep finding support there instead of breaking into a deeper selloff. The shift by miners toward AI inference could also improve revenue stability and reduce pressure to dump BTC during weak markets.
If energy costs rise or weaker miners keep selling, the production-cost floor may not hold as cleanly as the analysis suggests. The article also shows that many recent ETF and ETP buyers are still underwater, which could keep overhead supply heavy if price tries to recover.
