JPMorgan has lowered its bitcoin manufacturing price estimate following latest revisions to the Cambridge Bitcoin Electrical energy Consumption Index methodology.
“The present bitcoin manufacturing price falls to round $18,000 with the brand new methodology vs. $21,000 with the outdated methodology,” JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a report on Wednesday. Accordingly, electrical energy worth modifications will now have a smaller impact on bitcoin mining prices, the analysts famous.
The present market worth of bitcoin is round $25,800, in response to CoinGecko knowledge.
“We had beforehand calculated that every one cent per kWh [kilowatt hour] change within the electrical energy price induces a $4,300 change within the bitcoin manufacturing price. After the revised CBECI methodology, we see this sensitivity declining, however solely modestly to round $3,800,” the analysts stated.
“This sensitivity would mechanically double submit the 2024 halving occasion,” they added.
That is as a result of the upcoming bitcoin halving occasion will minimize the rewards miners obtain in half, and any modifications in electrical energy prices can have a bigger influence on their general bills, making price administration much more crucial for miners.
JPMorgan reiterated Wednesday that the halving occasion could possibly be a stress check for bitcoin miners, particularly given the excessive sensitivity of the bitcoin manufacturing price to electrical energy prices.
New CBECI methodology
The Cambridge Centre for Various Finance final week revised the methodology to reinforce the accuracy and reliability of the index, which tracks and estimates the electrical energy consumption of the Bitcoin community. The brand new CBECI methodology acknowledges that not all mining gear contributing to Bitcoin’s hash charge needs to be handled equally as a result of, in actuality, miners continuously improve to newer, extra environment friendly gear or function a mixture of varied machines with differing efficiencies.
“In conclusion, we performed this evaluation to check our speculation that will increase in community hash charge can doubtless be attributed to extra just lately launched mining {hardware},” the Cambridge Centre for Various Finance stated. “This speculation was based mostly on U.S. import knowledge, and we sought further proof to validate it.”
