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Breaking News: LINK Price Climbs Following Chainlink's Deal With US Commerce Department, Eyes $30
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Breaking News: LINK Price Climbs Following Chainlink's Deal With US Commerce Department, Eyes $30

JPMorgan Adjusts Bitcoin’s Production Cost: What This Means For BTC And Its Miners?

Samuel Edyme
Samuel Edyme
1 year ago
3 mins read
Bitcoin (BTC)

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Recent adjustments by JPMorgan in its estimation of Bitcoin’s production costs have garnered attention. Previously standing at $21,000, JPMorgan’s revised Bitcoin production cost has now been pegged at $18,000.

This move is closely tied to the Cambridge Bitcoin Electricity Consumption Index’s (CBECI) decision to update its methodology, highlighting the interconnectedness of financial analyses and industry metrics. Notably, the CBECI is known for its critical role in tracking and estimating the electricity consumption of the Bitcoin network. 

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Revised CBECI Methodology’s Impact On Mining Costs

JPMorgan analysts, under the guidance of Nikolaos Panigirtzoglou, noted in a recent report that the new methodology changes the landscape of Bitcoin’s production cost estimations. The report revealed:

The current Bitcoin production cost falls to around $18,000 with the new methodology vs. $21,000 with the old methodology.

According to the analyst, this shift implies that future changes in electricity prices will have a comparatively lesser effect on mining costs.

The CBECI’s adjustments have a broader impact than simply changing estimates. Analysts have discovered that changes in electricity costs can significantly reduce the cost of producing 1 Bitcoin.

With the new CBECI methodology, this sensitivity has decreased slightly to approximately $3,800, compared to the previous $4,300 change for every one cent per kWh (kilowatt hour).

According to the analyst, this sensitivity is expected to double after the 2024 halving event, which will decrease miners’ rewards by half. This change will amplify the importance of cost management due to the higher impact of electricity costs on the overall mining expenses.

Bitcoin Latest Price Action

So far, Bitcoin is still very much in the red. Following the asset’s 13% drop in the past month, slipping below $29,000, Bitcoin hasn’t made any significant movement aside from a continued downward trend. However, over the past 24 hours, BTC has seen some gains.

Bitcoin (BTC) price chart on TradingView
Bitcoin (BTC) price is moving sideways on the 4-hour chart. Source: BTC/USDT on TradingView.com

The top crypto currently trades for $25,902 at the time of writing, up by nearly 1% in the past day. Over the past month, more than $70 billion has been erased from the asset’s market cap.

Nevertheless, the past 24 hours have seen the asset record an inflow of $3 billion. While BTC’s price and market cap suffered a bloodbath, its trading volume was negatively impacted.

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Bitcoin’s Spot ETF: Will BTC Mimic Gold’s 2004 Price Surge? Analyst Weighs In

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Bitcoin has seen its trading volume fall from a high of $14 billion last Wednesday to as low as $3.5 billion yesterday and $8 billion in the past 24 hours. This is a significant plunge compared to the daily trading volume of more than $15 billion recorded early last month.

Featured image from iStock, Chart from TradingView

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Samuel Edyme
Samuel Edyme

Samuel Edyme

Meet Samuel Edyme, Nickname - HIM-buktu. A web3 content writer, journalist, and aspiring trader, Edyme is as versatile as they come. With a knack for words and a nose for trends, he has penned pieces for numerous industry player, including AMBCrypto, Blockchain.News, and Blockchain Reporter, among others.

Read more

Edyme’s foray into the crypto universe is nothing short of cinematic. His journey began not with a triumphant investment, but with a scam. Yes, a Ponzi scheme that used crypto as payment roped him in. Rather than retreating, he emerged wiser and more determined, channeling his experience into over three years of insightful market analysis.

Before becoming the voice of reason in the crypto space, Edyme was the quintessential crypto degen. He aped into anything that promised a quick buck, anything ape-able, learning the ropes the hard way. These hands-on experience through major market events—like the Terra Luna crash, the wave of bankruptcies in crypto firms, the notorious FTX collapse, and even CZ’s arrest—has honed his keen sense of market dynamics.

When he isn’t crafting engaging crypto content, you’ll find Edyme backtesting charts, studying both forex and synthetic indices. His dedication to mastering the art of trading is as relentless as his pursuit of the next big story. Away from his screens, he can be found in the gym, airpods in, working out and listening to his favorite artist, NF. Or maybe he’s catching some Z’s or scrolling through Elon Musk’s very own X platform—(oops, another screen activity, my bad…)

Well, being an introvert, Edyme thrives in the digital realm, preferring online interaction over offline encounters—(don’t judge, that’s just how he is built). His determination is quite unwavering to be honest, and he embodies the philosophy of continuous improvement, or “kaizen,” striving to be 1% better every day. His mantras, “God knows best” and “Everything is still on track,” reflect his resilient outlook and how he lives his life.

In a nutshell, Samuel Edyme was born efficient, driven by ambition, and perhaps a touch fierce. He’s neither artistic nor unrealistic, and certainly not chauvinistic. Think of him as Bruce Willis in a train wreck—unflappable. Edyme is like trading in your car for a jet—bold. He’s the guy who’d ask his boss for a pay cut just to prove a point—(uhhh…). He is like watching your kid take his first steps. Imagine Bill Gates struggling with rent—okay, maybe that’s a stretch, but you get the idea, yeah. Unbelievable? Yes. Inconceivable? Perhaps.

Edyme sees himself as a fairly reasonable guy, albeit a bit stubborn. Normal to you is not to him. He is not the one to take the easy road, and why would he? That’s just not the way he roll. He has these favorite lyrics from NF’s “Clouds” that resonate deeply with him: “What you think's probably unfeasible, I've done already a hundredfold.”

PS—Edyme is HIM. HIM-buktu. Him-mulation. Him-Kardashian. Himon and Pumba. He even had his DNA tested, and guess what? He’s 100% Him-alayan. Screw it, he ate the opp.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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