JP Morgan Claims Drop In Bitcoin Production Cost Is Negative For BTC Price
July 15 2022 - 9:00AM
NEWSBTC
The recent crypto winter has affected miners negatively to the
extent that many sold off their Bitcoin and other crypto holdings.
In addition, many of these miners could not even pay their loans
since their rigs’ values plummeted. As the price falls, there have
been a lot of losses for them, given the cost of producing BTC. But
now, recent events show that even the cost of producing the crypto
for miners has also dropped. Recent news states there has been a
50% dip in the cost of producing Bitcoin. JP Morgan Chase & Co
stated this in a recent report. JPMorgan Chase & Co is an
American-based multinational investment bank. BTC Production Cost
Drops To $13,000 Strategists headed by Nikolaos Panigirtzoglou at
Wall Street banking announced the plunging of BTC production costs.
According to the report, the Bitcoin production cost as of June
2022 was $24,000. But currently, the production cost stands at
$13,000. The strategists added that this could, in turn, hurt the
prices of digital tokens. Suggested Reading | Avalanche
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Noise? They also cited that the primary cause of the decline in the
production cost can be traced to the limited use of electricity.
This report was drawn from the Cambridge Bitcoin Electricity
Consumption Index data. As per JPMorgan, this can also affect the
price of Bitcoin, looking at the present bearish trend of the
digital currency market. Defeat Of Bitcoin Miners Bitcoin and the
whole digital market have been facing a new phase of a bearish
market. The event can be traced back to November 2021, after
Bitcoin hit its ATH (all-time-high) of $69K. This occurrence has
affected certain high-profile companies and blockchains. A
prominent example to note is the crashing of the LUNA digital
token, which was based on the Terra blockchain. Another instance
includes the insolvency of Three Arrows Capital (3AC). Also, the
information about the hiking rates of the Federal Reserve to fight
inflation is another example to note. Drawing from the crypto
market watch, the most significant digital token, BTC, has been
fluctuating around the $20K mark. This is about 70% of the digital
token’s price drop last year. The drastic price change in the
Bitcoin price posed a high level of uneasiness in the minds of BTC
miners. This high price crash was why many BTC miners sold off the
digital asset. This was notable in the second quarter of this year.
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Goes Bankrupt With this newest development, miners’ profitability
will at least increase, and the craze to sell their holdings will
reduce. But analysts believe that the bitcoin price might be
affected negatively in the long run since the cost of producing it
is now lower. If this keeps happening, investors who already have
BTC in their portfolios will lose more. Featured image from
Pixabay, charts TradingView.com
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