Bitcoin Production Cost Has Dropped to About $13K, JPMorgan Says

The drop in bitcoin’s production cost stems from the “decline in electricity use as proxied by the Cambridge Bitcoin Electricity Consumption Index, while the hash rate has been fluctuating in recent months with no clear downtrend,” according to JPMorgan strategists led by Nikolaos Panigirtzoglou.

While improved profitability means there may be less pressure for miners to sell their bitcoin holdings for liquidity purposes, the drop in production costs could be viewed as a negative for overall bitcoin price, JPMorgan added in its note to clients.

“The decline in the production cost might be perceived as negative for the bitcoin price outlook going forward to the extent that the production cost is perceived by some market participants as the lower bound of the bitcoin’s price range in a bear market.”