JPMorgan Cuts Bitcoin Production Cost Estimate to $90,000 as Miner Selling Intensifies

JPMorgan analysts lowered their Bitcoin production cost estimate to $90,000 from $94,000, based on electricity pricing of $0.05 per kilowatt-hour, according to a Wednesday report by Managing Director Nikolaos Panigirtzoglou and his team. The analysis found high-cost miners face an additional $18,000 in production costs for every $0.01/kWh increase in electricity prices. Downward pressure on Bitcoin prices stems from declining network hashrate and mining difficulty, driven by China's renewed crackdown on private mining and margin compression from lower Bitcoin prices and elevated energy costs forcing high-cost miners outside China to exit. Some high-cost miners have been compelled to sell Bitcoin in recent weeks as elevated electricity prices and lower Bitcoin prices squeeze profitability, with Bitcoin prices continuing to hover below production costs despite the hashrate decline typically benefiting miner revenues.