In the first month of summer alone, the cost of producing one BTC reduced from ~$24,000 to ~$13,000. It negatively affects the asset’s price.
Recall, that a couple of weeks ago, JPMorgan strategists stated that mining companies that lack liquidity could continue to exert downward pressure on digital gold quotes in Q3.
New Equipment – New Troubles
Analysts at the largest US bank noted that the lowering of the Bitcoin mining expense was largely caused by a reduction in electricity consumption. The reason is that miners started to deploy more efficient equipment and refuse to use old outdated hardware. This could be a natural reason for the coin’s price drop.
While clearly helping miners’ profitability and potentially reducing pressures on miners to sell Bitcoin holdings to raise liquidity or for deleveraging, the decline in the production cost might be perceived as negative for the Bitcoin price outlook going forward – the strategists wrote.
Looks like the short-term prospects for BTC and the whole crypto market are far from encouraging. However, if we look at the situation from a global perspective, nothing has changed – the digital economy keeps on growing and conquering new markets.