The cost of mining Bitcoin decreased from $24,000 to $13,000 last month, which could be a negative factor for the price of the asset, Bloomberg has reported citing JPMorgan experts.
According to the bank’s strategists, the fall in the cost of mining BTC is largely due to a reduction in electricity consumption. This comes as miners are deploying more efficient rigs to replace obsolete hardware being shut down.
However, according to JPMorgan analysts, who are led by Nikolaos Panigirtzoglou, what is happening could become an obstacle to the growth of the cryptocurrency price. The experts have said:
“While this clearly helps miners make a profit and potentially reduces the pressure to sell Bitcoin reserves to increase liquidity or reduce leverage, the cost reduction can be seen as a negative for the future price of BTC. Some market participants perceive the cost of production as the lower limit of the price range of an asset in a bearish phase.”