According to JPMorgan, a reduction in the production costs of Bitcoin could cause prices to drop in the market.
The cryptocurrency market has experienced considerable decadence in recent months; prices have been crumbling down from Bitcoin’s all-time high peaks of around $69,000.
However, there are also vital aspects of this situation to take into account. According to JPMorgan, the cost of production of Bitcoin could fall to as low as $13K. This situation might affect the crypto market.
JPMorgan Explains the Facts that Have Lowered the Cost of Bitcoin Production
According to reports revealed by JPMorgan, a fall in Bitcoin production costs may negatively affect the market. Precisely, as expressed in the Telegram channel KEY ALERTS, they highlight that prices have declined from $24,000 to their current levels of around $13,000. All this situation took effect at the beginning of June and still happens to the current date.
On the one hand, Bitcoin miners managed to minimize their consumption rate of conventional energy. Since the current fight against carbon emissions has impacted many sectors of the world economy, Bitcoin miners have chosen to look for more sustainable solutions. But this decision could end up causing a more prominent drop in Bitcoin prices.
On the other hand, according to a group of strategists led by Nikolaos Panigirtzoglou, who appreciated the Cambridge Bitcoin Electricity Consumption Index, this change happens thanks to miners’ efforts to create a shield over the sustainability and generate more efficient mining rigs. However, they explained that this decision could become a significant obstacle that could cause Bitcoin prices to fall.
Why Bitcoin’s $13,000 is the Most Prominent Number to Watch in the Market
Regarding other details, the experts also expressed in the report that the market usually describes the cost of production of Bitcoin as a strong support zone when carrying out activities in a bear market like the one they are currently facing.
Therefore, it is worth watching the $13,000 for the following days. According to JPMorgan strategists, Bitcoin miners could push the price to the third quarter of 2022. Not only because of this fact but also because of the FED hikes, which strengthen the dollar and bring losses to the equity markets.
For many Bitcoin enthusiasts, this current decadence is reminiscent of the crypto winter that happened in late 2017 and early 2018, when the price of bitcoin fell from 80% to as low as $3,100 after making its first big rally to $20,000 and bringing with it many new digital assets and new investors.
In fact, if there is something scary in some seasons, it is because these periods in bitcoin also take effect in the form of cycles.
That ‘winter’ generated the failure of many initial coin offerings and led the most prominent banks and entities to shelve their intentions to become part of the crypto space. Bitcoin did not recover until reaching a new high peak in December 2020, at the start of the COVID-19 pandemic.
By: Jenson Nuñez
