BTC mining costs hit 10-month low as miners use more efficient rigs
It now costs less to mine a single bitcoin, which could help reverse the downward trend in profitability while reducing the energy demand on the network.
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The cost of mining one bitcoin (BTC) has fallen to a ten-month low as mining hardware becomes more efficient, and the difficulty has dropped 6.7% since its peak of May.
On Wednesday, JPMorgan strategists led by Nikolaos Panigirtzoglou told investors that Bitcoin production costs had fallen to around $13,000 from $24,000 in early June.
This is the lowest since September 2021, according to analysts citing a chart from Bitinfocharts, and comes as mining difficulties fell from their May highs of 31.25T to 29.15T.
Lower Bitcoin production costs can potentially ease miner selling pressure and improve profitability. However, the strategists were still bearish, stating that "the lower cost of production could be seen as a negative for Bitcoin's price outlook going forward," according to Bloomberg.
They added that the cost of production is seen by some analysts as the lower bound of the BTC price range in a bear market. Several analysts predicted that BTC prices would fall to around $13,000, which would line up with the more than 80% declines of the previous two bear markets. Bitcoin is currently trading down 70% from its all-time high in November.
Bitcoin's cost of production peaked just after the April and November 2021 price peaks and fell as the markets did, so it's correlated but lagging price movements.
Lower production costs were linked to lower electricity consumption.
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It now costs less to mine a single bitcoin, which could help reverse the downward trend in profitability while reducing the energy demand on the network.
New
The cost of mining one bitcoin (BTC) has fallen to a ten-month low as mining hardware becomes more efficient, and the difficulty has dropped 6.7% since its peak of May.
On Wednesday, JPMorgan strategists led by Nikolaos Panigirtzoglou told investors that Bitcoin production costs had fallen to around $13,000 from $24,000 in early June.
This is the lowest since September 2021, according to analysts citing a chart from Bitinfocharts, and comes as mining difficulties fell from their May highs of 31.25T to 29.15T.
Lower Bitcoin production costs can potentially ease miner selling pressure and improve profitability. However, the strategists were still bearish, stating that "the lower cost of production could be seen as a negative for Bitcoin's price outlook going forward," according to Bloomberg.
They added that the cost of production is seen by some analysts as the lower bound of the BTC price range in a bear market. Several analysts predicted that BTC prices would fall to around $13,000, which would line up with the more than 80% declines of the previous two bear markets. Bitcoin is currently trading down 70% from its all-time high in November.
Bitcoin's cost of production peaked just after the April and November 2021 price peaks and fell as the markets did, so it's correlated but lagging price movements.
Lower production costs were linked to lower electricity consumption.
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