Bitcoin
Bitcoin (BTC) mining cost estimate drops to $45,000 as inefficient miners exit: JPMorgan
Bitcoin’s current hashrate and energy consumption (BTC) The network carries an estimated mining cost of around $45,000, down from $50,000, JPMorgan (JPM) said in a research report on Thursday.
The bank said it had already anticipated a significant drop in hashrate following the halving as unprofitable miners exit the network. This is happening now, but with some delay. O quadrennial halvingwhich slows the rate of growth in bitcoin supply as miner rewards are reduced by 50%, occurred last month.
Hash rate refers to the total combined computing power being used to extract and process transactions in a proof of work blockchain. The reason for the delay was probably the launch of Rune protocola new way of creating tokens on the network, which triggered a temporary spike in transaction fees, the report said.
“This provided a temporary boost to miners’ revenue shortly after the bitcoin halving,” wrote analysts led by Nikolaos Panigirtzoglou, adding that “bitcoin miners were able to offset the loss in issuance reward due to the halving with the increase in fees of transactions, keeping block rewards for miners almost unchanged.”
“However, Runes’ momentum has proven to be short-lived, with user activity and fees falling sharply over the past two weeks,” the authors wrote, noting that “this highlights the ongoing challenge faced by bitcoin miners in maintaining a sustainable source of revenue, particularly in the post-halving environment.”
As the Rune hype faded and the temporary boost for miners dissipated, power consumption on the network fell more than hashrate, which shows that unprofitable miners with inefficient rigs left, the bank said.
There is also a feedback loop with bitcoin prices. “The more bitcoin prices fall, the greater the number of unprofitable miners who come under pressure to leave the Bitcoin network and the greater the resulting decline in hash rate and bitcoin production. [mining] cost,” the report added.
JPMorgan sees limited upside for bitcoin in the near term due to several previously identified headwinds, including a lack of positive catalysts and fading retail momentum.