Drop In Bitcoin Production Cost Is Terrible For BTC Price, According To JP Morgan

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Last Updated on July 15, 2022 by Bitfinsider

Miners were negatively impacted by the current crypto winter to the point where many of them sold off their Bitcoin and other crypto assets. Many of these miners were also unable to repay their debts since the value of their rigs fell.

Given the expense of generating BTC, they have suffered significant losses as the price has fallen. However, recent occurrences demonstrate that even the cost of creating the cryptocurrency for miners has decreased as well. According to recent report by JP Morgan Chase & Co., the cost of generating Bitcoin has decreased by 50%.

Cost of BTC Production Falls to $13,000 

Wall Street financial strategists, under the direction of Nikolaos Panigirtzoglou, announced the sharp decline in BTC production costs. The report states that at the start of June 2022, the cost to produce one bitcoin was $24,000. However, the cost of production is currently $13,000. The strategists also stated that this might lower the value of digital tokens.

They added that the minimal use of electricity was the main factor in the drop in production costs. Data from the Cambridge Bitcoin Electricity Consumption Index were used to create this report.

In light of the current unfavorable trend in the market for digital currencies, according to JP Morgan, this may also have an impact on the price of Bitcoin.

Is this The End for Bitcoin Miners?

A new bearish market phase has started affecting Bitcoin and the entire digital market since the start of November 2021, shortly after Bitcoin reached its ATH (all-time high) of $69,000.

This incident has impacted a number of well-known businesses and blockchains. The collapse of the LUNA digital coin, which was built on the Terra blockchain, serves as a notable illustration.

Another two example is the Three Arrows Capital (3AC) bankruptcy and the announcement regarding the increase of the Federal Reserve’s hiking rates to combat inflation.

The most important digital asset, BTC, has been bouncing around the $20K threshold, according to the cryptocurrency market watch. This represents a price reduction of the digital token of nearly 70% from the previous year.

BTC miners were extremely uneasy as a result of the sharp drop in the price of bitcoin. Many Bitcoin miners sold off the crypto assets as a result of the sharp price drop, as noted in the second quarter of 2022.

The profitability of miners will at least rise as a result of this most recent development, and the trend toward selling their shares will lessen. However, analysts think that because the cost of creating bitcoin is now cheaper, its price may be adversely impacted over the long term. Investors who currently own Bitcoin will lose more money if this continues.


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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.


Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.

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