Large investment bank JP Morgan said the cost of producing Bitcoin fell 50% to $13,000.
On the 13th (local time), Wall Street bank JP Morgan recently published a report suggesting that the cost of producing Bitcoin has fallen by 50% in the past month, Coingape, a cryptocurrency media outlet, reported on the 13th (local time).
The cost of producing BTC has decreased from $24,000 in early June 2022 to $13,000 today.
JP Morgan strategist led by Nikolaos Panigirtzoglou wrote that the decline occurred amid declining electricity usage according to data from the Cambridge Bitcoin Electricity Consumption Index.
The giant bank notes that this is an effort by miners to protect profitability and deploy efficient equipment. However, this could also be a major obstacle to the rise of the Bitcoin price.
J.P. Morgan strategists said, “While it can increase liquidity or deleverage by helping miners become more profitable and potentially reducing pressure on miners to sell their bitcoin holdings, a decline in production costs could be perceived negatively in the future bitcoin price outlook. “He said. The cost of production is perceived by some market participants as the lower bound of the price of Bitcoin in a bear market.
Bitcoin Miner Capital
During the second quarter of 2022, Bitcoin miners were selling. As the Bitcoin price plunged 70% from its all-time high in November 2021, miners were forced to sell more BTC than they produced to cover operating costs.
Last month, JP Morgan strategists said Bitcoin could face selling pressure in the third quarter as well. Bitcoin miners are more likely to liquidate their holdings in the future. Also, if the price of BTC production reached $13,000 in JPMorgan terms, miners could benefit significantly from the new BTC production.
On-chain data provider Glassnode recently diagnosed the LTH (long-term holders) capitulation, saying, “It is likely that an LTH capitulation is underway. Bitcoin investors are still at a standstill.”
On the positive side, according to Coingape, Bitcoin (BTC) still needs to cross the 200-day EMA at around $22,500 and stay above that level before it can resume its uptrend.