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According to a report by JPMorgan Chase, the cost of producing bitcoin has fallen by $7,000 to $13,000, which could lead to lower prices.
The bank's analysts estimate that the cost of producing bitcoin in early June fell from $20,000 to $15,000 at the end of the month and then to $13,000. The drop is explained by a decrease in electricity consumption.
The report noted that given the recent drop in the price of bitcoin, miners are working to increase their profitability by using more energy efficient mining rigs.
However, this fall could have a negative impact on the price of bitcoin.
To calculate the cost of production, JPMorgan treated bitcoin as a commodity and estimated the marginal cost of production by incorporating price, hash rate, and difficulty data from bitinfocharts.com.
The massive sale of cryptocurrencies compared to last year's all-time highs wiped out a total market capitalization of $2 trillion.
Bitcoin has also fallen significantly, with the world's largest cryptocurrency experiencing its worst quarter in 11 years, down 56% in the second quarter.
The sharp price drop began with the collapse of the Terra blockchain in May and accelerated due to the risk of contagion that has spread through crypto lending platforms.
Meanwhile, the macro environment is still not supportive of risky assets, which Bitcoin accurately reflected this year. Inflation continues to surprise with its rise, recession fears are growing, and the markets are now waiting for the Federal Reserve to raise the rate by 100 basis points.
In a report this week, Bank of America said that the impact of inflation on US consumers in 2022 will lead to a recession. The bank's economists predict negative real GDP growth for 2022. And the fact that real GDP will decrease by 1.4% and grow by 1.0% in 2023.