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    JPMorgan: Bitcoin mining cost could drop to $13,000

    According to JPMorgan Chase & Co, the cost of bitcoin production has dropped from around $24,000 in early June to around $13,000 currently, which could be seen as a negative impact on pricing.

    The drop in production cost estimates is almost entirely due to lower electricity consumption, as evidenced by the Cambridge Bitcoin Miner Electricity Consumption Index, analysts led by Nikolaos Panigirtzoglou wrote in a note on Wednesday. They argue that this change is consistent with the efforts of miners to protect profitability by deploying more efficient mining rigs, as opposed to an exodus of less efficient miners. They also say that this could be seen as a drag on prices.

    While clearly helping miners improve profitability and potentially reducing the pressure on miners to sell bitcoin assets to increase liquidity or deleverage, lower production costs can be seen as negative for bitcoin price prediction going forward. The cost of production is perceived by some market participants as the lower end of the Bitcoin price range in a bear market, analysts said.

    Bitcoin has been in decline ever since it peaked around $69,000 in November. It has been down about 60% since the beginning of the year as the Federal Reserve raised interest rates to fight inflation, leading to high-profile crashes in the crypto industry, including the downfall of Terra/Luna and the bankruptcy of Three Arrows Capital. The largest token has been in a range of around $20,000 for about a month now.

    Last month, JPMorgan strategists led by Panigirtzoglou said bitcoin sales by miners could put pressure on the price in the third quarter as operations boost liquidity, cover costs and possibly reduce leverage.

    As seen on PlayGround

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