- The decline in BTC’s production cost could be bad for the token as the negative outlook on its price looms amid a bear market, experts say.
- JPMorgan strategists suggest that the dwindling numbers “might be perceived as negative” for the price of bitcoin.
- Nikolaos Panigirtzoglou’s team posits that the plunge is the result of an effort of miners to protect profitability by deploying efficient mining rigs.
The decline in bitcoin’s (BTC’s) production cost could prove to be detrimental for the top cryptocurrency as the negative outlook on its price looms amid a bear market, experts say.
As reported by Bloomberg, JPMorgan strategists led by Nikolaos Panigirtzoglou suggest that the dwindling numbers “might be perceived as negative” for the price of bitcoin.
The decline in the production cost might be perceived as negative for the Bitcoin price outlook going forward. The production cost is perceived by some market participants as the lower bound of the Bitcoin’s price range in a bear market.
Initially, the team of strategists found that the cost of producing bitcoin dropped from $24,000 at the beginning of June to around $13,000. They noted that the drop follows the fall in electricity use as cited in the Cambridge Bitcoin Electricity Consumption Index.
JPMorgan strategists also posit that this development is a result of the effort on the side of miners to protect profitability by deploying efficient mining rigs, in contrast with the mass exodus by less efficient miners.
“[The drop in BTC’s production cost is] helping miners’ profitability and potentially reducing pressures on miners to sell Bitcoin holdings to raise liquidity or for deleveraging,” the note reads.
The biggest cryptocurrency in terms of market capitalization and trading volume continues to hover around $20,000, up 2.5% in the past 24 hours. Based on the numbers from CoinGecko, BTC is down by 71% from its all-time high of over $69,000 in November 2021.