HomeBitcoinJP Morgan Predict a Floor of $13,000 for Bitcoin as it Continues...

JP Morgan Predict a Floor of $13,000 for Bitcoin as it Continues to Tremble.


Bitcoin continues to oscillate about the $20,000 mark incessantly, remaining in a consolidation period that has already lasted approximately a month.

So the issue is, will this consolidation result in a lasting comeback, even a bull market for Bitcoin, or will it result in additional losses?

JP Morgan analysts presented arguments for the second alternative in a note issued this week, alluding specifically to the function of bitcoin miners.

Miners, the backbone of the bitcoin ecosystem, use enormous amounts of energy to safeguard the network and guarantee that transactions on the blockchain flow smoothly. In exchange, they are given tokens that they may either sell or retain.

“The battle for the survival of bitcoin miners has resulted in an improvement in mining efficiency and, as a result, a drop in the cost of bitcoin production,” said JPMorgan analysts led by Nikolaos Panigirtzoglou (NYSE: JPM) in a note on Wednesday.

The bank’s analysis team believes that the average cost of manufacturing bitcoin – which, together with the price of tokens, is a significant driver of miner profit margins – has dropped dramatically in the last month. According to researchers, the cost of mining a single bitcoin was approximately $20,000 at the beginning of June, down from $15,000 at the end of last month, and is now under $13,000.

JP Morgan described the dynamics of Bitcoin’s electricity usage and hashrate – the computer power needed in the mining process – as “a substantial attempt by miners to maintain their profitability by deploying more efficient mining equipment rather than a mass exodus of less efficient miners.”

“While it certainly enhances miners’ income and perhaps decreases the need for miners to liquidate their bitcoin holdings in order to gain liquidity or deleverage,” the letter added.

Indeed, some market players believe that the cost of creating bitcoin represents the lower bound of bitcoin’s price range in a bear market. As a result, after plunging 70% from its highs last November, Bitcoin’s negative potential remains untapped.

It is worth noting that a drop in Bitcoin to $13,000 would represent a loss of more than 35% compared to the current BTC/USD pricing.

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