Share this article
Bitcoin Production Cost Has Dropped to About $13K, JPMorgan Says
Declining production costs could be seen as a negative for bitcoin prices, the Wall Street bank said in a report.
Updated May 11, 2023, 5:42 p.m. Published Jul 14, 2022, 3:03 p.m.
Make us preferred on Google
The cost to produce bitcoin (BTC) has fallen to about $13,000 from around $20,000 at the start of June as miners battle the bear market and efficiency in mining rises, according to investment bank JPMorgan.
- The drop in bitcoin’s production cost stems from the “decline in electricity use as proxied by the Cambridge Bitcoin Electricity Consumption Index, while the hash rate has been fluctuating in recent months with no clear downtrend,” according to JPMorgan strategists led by Nikolaos Panigirtzoglou.
- While improved profitability means there may be less pressure for miners to sell their bitcoin holdings for liquidity purposes, the drop in production costs could be viewed as a negative for overall bitcoin price, JPMorgan added in its note to clients.
- “The decline in the production cost might be perceived as negative for the bitcoin price outlook going forward to the extent that the production cost is perceived by some market participants as the lower bound of the bitcoin’s price range in a bear market.”
More For You
From Wall Street to Web3: This is crypto’s year of integration, Silicon Valley Bank says
From bank-led stablecoins to tokenized T-bills and AI-powered wallets, digital assets will move from pilot projects to financial plumbing this year.
What to know:
- Silicon Valley Bank's Anthony Vassallo says institutional adoption of crypto is accelerating, pushing bigger venture capital checks, more bank-led custody and lending, and deeper M&A consolidation.
- Stablecoins are emerging as the “internet’s dollar,” fueled by clearer regulation and enterprise demand for payments and settlement.
- Tokenized real-world assets and AI-driven crypto applications are shifting blockchain from speculation to core infrastructure, the bank said.
Top Stories
