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Bitcoin (BTC) Mining Cost Estimate Drops to $45,000 as Inefficient Miners Leave: JPMorgan
Bitcoin’s current hashrate and power consumption (BTC) The network carries an estimated mining cost of around $45,000, down from more than $50,000, JPMorgan (JPM) said in a research report on Thursday.
The bank said it had previously predicted a significant decline in the hashrate after the halving as unprofitable miners left the network. This is happening now, but with some delay. THE halving over four yearswhich slows the growth rate of bitcoin supply, with miner rewards reduced by 50%, occurred last month.
Hash rate refers to the combined total computing power used to mine and process transactions on a proof of work blockchain. The reason for the delay was probably the launch of the Runic Protocola new form of token creation on the network, which triggered a temporary tip in transaction fees, the report said.
“This gave a temporary boost to miner revenues immediately after the Bitcoin halving,” wrote analysts led by Nikolaos Panigirtzoglou, adding that “Bitcoin miners were able to compensate for the loss of issuance reward due to the halving with increasing transaction fees, keeping block rewards for miners almost unchanged.
“However, the boost provided by Runes is proving short-lived, with user activity and fees dropping dramatically over the past two weeks,” the authors write, noting that “this highlights the ongoing challenge facing Bitcoin miners in maintaining a sustainable source of resources.” income especially in the post-halving environment.
As the Runes hype faded and the temporary boost given to miners dissipated, energy consumption on the network declined more than the hashrate, showing that unprofitable miners with inefficient platforms are gone, the bank said.
There is also a feedback loop with Bitcoin prices. “The lower Bitcoin prices fall, the greater the number of unprofitable miners who are pressured to leave the Bitcoin network and the greater the resulting drop in hashrate and Bitcoin production. [mining] cost,” the report added.
JPMorgan sees limited upside potential for Bitcoin in the near term due to several previously identified headwinds, including the lack of positive catalysts and fading retail momentum.