Bitcoin Dips Below Mining Costs: Will Trump's 10% Credit Cap Spark Increased Demand?

As Bitcoin [BTC] experiences fluctuations, there may be budding opportunities on the horizon. Recently, outflows seem to have hit a low point in late December, leading Bitcoin's price to drop below mining costs—typically a period when selling tends to slow down. Additionally, U.S. President Donald Trump’s proposed credit cap might attract more interest in Bitcoin.

Key Takeaways

Bitcoin is experiencing price fluctuations, currently trading below mining costs.
Trump’s proposed 10% credit cap might redirect demand toward Bitcoin and DeFi platforms.
Changes in the crypto market and mining costs can influence miner behavior and market stability.
Analyst insights suggest that while recovery signs are emerging, the market still faces liquidity concerns.

Bitcoin dips below mining costs - Will Trump's 10% credit cap spark increased demand?

While the crypto community remains cautious for the year ahead, they might just find themselves in a favorable position.

Unforeseen, Yet Positive Effects

Trump's proposal to cap credit card interest rates

Source: X

Trump's plan to limit credit card interest rates to 10% aims to alleviate consumer strain, but its ripple effects could extend beyond traditional finance (TradFi). This interest rate cap could restrict credit access for borrowers with lower credit scores, generally below 780, prompting banks to reconsider their lending criteria and pricing.

trump bitcoin

Source: X

As a result, some people may seek alternatives due to altered market conditions. A portion of this new demand could shift toward Bitcoin and decentralized finance (DeFi) platforms, where borrowing is not reliant on credit scores.

Shift in Risk Dynamics

The cost of mining one Bitcoin stood at approximately $101,600 as of January 10th, with the price of Bitcoin itself trading around $90,900 just a day later. Essentially, Bitcoin’s market price has fallen below its production costs.

Mining costs vs. Bitcoin price

Source: X

When mining Bitcoin becomes unprofitable, miners usually reduce their selling activity and cut costs, creating a potential floor for prices. While this doesn’t guarantee a quick recovery, historically, trading below mining costs has often indicated reduced downside risk.

A Stable Market Emerges

Analyst Willy Woo recently suggested on X that Bitcoin outflows likely reached their lowest point in late December. This observation correlates with Bitcoin's drop below mining costs and the early signs of recovery currently taking place.

Bitcoin outflows and price changes

Source: X

Changes in these outflows often take time to reflect in Bitcoin's price, which explains the slow pace of recovery. Additionally, there’s been a resurgence in futures trading, providing some short-term support. Nevertheless, Woo advises caution about the outlook for 2026, given the weak liquidity that has persisted since last year. Without a noticeable increase in long-term Bitcoin spot inflows, sustaining any rally may prove challenging.

Final Thoughts

As the cryptocurrency landscape evolves, both challenges and opportunities arise. The interplay between market dynamics, regulatory changes, and emerging trends will determine Bitcoin's future trajectory. The ongoing situation will be crucial for both miners and investors to monitor closely.