In June, the cost of production of Bitcoin decreased from $24,000 to $13,000, which could be a negative factor for the price of digital gold.
The bank’s strategists noted that the drop in the cost of mining the first cryptocurrency is largely due to a reduction in electricity consumption. Miners deploy more efficient rigs to replace outdated hardware going out of business.
However, according to JP Morgan, what is happening could become an obstacle to the growth of the cryptocurrency’s price.
“While this helps miners make a profit and potentially reduces pressure to sell Bitcoin reserves to increase liquidity or leverage, the cost reduction can be seen as a negative for the future price of BTC. Some market participants perceive the cost of production as the lower limit of an asset’s price range in a bearish phase, ” the experts said
Previously, analysts, JPMorgan predicted downward pressure on Bitcoin prices from miners needing liquidity in the third quarter.
Recall that in July, the bank’s strategists suggested that the worst for the crypto market was over.