Miners were negatively affected by the recent crypto winter. Many sold their Bitcoins and other crypto assets. In addition, many of these miners could not even pay their loans since their rigs’ values plummeted.
Due to the high cost of creating BTC, they have suffered a lot as the price drops. Recent events have shown that the price of mining crypto has dropped as well.
According to recent news, there’s been a half-off in Bitcoin production costs. JP Morgan Chase & Co stated this in a recent report. JPMorgan Chase & Co is an American-based multinational investment bank.
BTC Production Costs Drop to $13,000
Wall Street Banking strategists Nikolaos Pantigirtzoglou led announced the plunge of BTC production prices. The Bitcoin production cost in June 2022 stood at $24,000, according to this report. The production cost currently stands at $13,000. This could impact the price of digital tokens, according to strategists.
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The primary reason for the drop in production costs can also be attributed to limited electricity use. This report was based on the Cambridge Bitcoin Electricity Consumption Index data.
JPMorgan believes that this could also impact the Bitcoin price, given the current bearish trend in the market for digital currencies.
Bitcoin miners lose
The market for digital currencies has entered a new bearish phase. This event is traceable back to November 2021 when Bitcoin reached its all-time high of $69K.
This has been a problem for some high-profile blockchains as well as companies. One notable example is the crash of the LUNA token. It was based upon the Terra blockchain.
The insolvency (3AC) of Three Arrows Capital is another example. Another example is the Federal Reserve’s hike rates to combat inflation.
The crypto market watch shows that the price of the largest digital token, BTC (Bitcoin Token), has fluctuated between the $20K and $30K marks. This is about 70% of the digital token’s price drop last year.
BTC miners were worried about how the Bitcoin price would change. Many BTC miners had to sell the digital asset because of this high price crash. It was evident in the second quarter.
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With this newest development, miners’ profitability will at least increase, and the craze to sell their holdings will reduce. Analysts believe the price of bitcoin could be negatively affected as the production cost is lower. This will continue, and investors with bitcoin in their portfolios could lose even more.
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