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JP Morgan: Cost of Bitcoin Production Even Lower – Is That Bad News?



Miners of cryptocurrencies have been having a hard time lately. Not only have the prices of Bitcoin (BTC) and other coins fallen hard, the energy costs have also risen sharply. But according to JP Morgan, it’s all not too bad.

Bitcoin mining is still profitable

That writes Bloomberg† who has read a report for investors from JP Morgan. Emphasized in this reporte marketing director Nikolaos Panigirtzoglou Wednesday that Bitcoin’s production costs have fallen to around $13,000. In June, this level was still around USD 24,000.

That’s because miners have worked hard on profitability by deploying newer mining ASICs, for example. the fallen mining difficulty will also have helped, because of that miners are able to get at the same hash rate to mine bitcoins. Electricity prices have also decreased slightly.

At the time of writing, the price of BTC stands at around 20,000 US dollars. If miners can still cover the costs at a price of $13,000, Bitcoin could theoretically fall just over 35% before the problems really get serious.

Still not good bitcoin news?

However, this is not necessarily good news. The JP Morgan CEO emphasizes that miners can choose to sell because of this, so that they have enough capital to get through a possible correction, cover energy costs and possibly pay off debt. ‘Some see production costs as the bottom in a bear market,’ explains Panigirtzoglou.

We recently wrote that FTX CEO Sam Bankman-Fried also wants to help miners financially after several crypto banks. That didn’t sound like miners are doing well. Compass Mining is already in a legal dispute because it was unable to pay the energy costs.

If mining really no longer becomes profitable, it can always happen that miners temporarily shut down if the costs really skyrocket. That would have consequences for the stability of the network, but it would save miners a lot of money. We’ll see where the price ends up in the near future.



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