JPMorgan Adjusts Bitcoin Production Cost Estimate to $45K Amid Mining Changes
- JPMorgan has revised its estimate for Bitcoin production costs to $45,000, up from $42,000.
- The bank attributes the delay in hashrate reduction to the launch of the Runes protocol.
- It also forecasts limited short-term growth for Bitcoin due to a lack of positive catalysts and declining retail interest.
According to a recent media report, multinational investment bank JPMorgan has adjusted its central estimate for Bitcoin production costs from $42,000 to $45,000 due to changes in the Bitcoin mining hashrate.
The bank noted that they had expected a substantial decrease in hashrate following the halving, as unprofitable miners would leave the network. This reduction is occurring, albeit later than anticipated.
Additionally, the delay was likely caused by the launch of the Runes protocol, a novel method for token creation on the network, which led to a brief increase in transaction fees, according to the report.
For those unfamiliar, hashrate is basically the overall computational power utilized for mining and processing transactions on a proof-of-work blockchain.
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Moreover, JPMorgan forecasts limited short-term growth for Bitcoin, citing several challenges such as the absence of positive drivers and the waning interest from retail investors.
Not to mention, in February, analysts projected that the production cost of a single Bitcoin would be $42,000. As a result, they also set a price target of $42,000 for Bitcoin, anticipating that the excitement following the halving would diminish by April.
Edited by Harshajit Sarmah
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