Wednesday , June 16 2021

Bitcoin now costs less than it costs to me: JP Morgan

Analysts at JPMorgan Chase & Co. the average cost of creating one Bitcoin is about $ 4060 globally.

Since Bitcoin himself trades below $ 3,600, it does not look so good a deal. However, the average is large, which means that there are clear winners and losers.

Low-cost Chinese miners are able to pay much less – the forecast is about $ 2,400 for Bitcoin – by using direct electricity purchase contracts with power generators, such as aluminum smelters that want to sell excess electricity, analysts from JPMorgan , led by Natasha Kaneva January 24th Report on CryptoLight, headed by Joyce Chang.

Electricity is the largest mining price needed to handle the powerful computer platforms used to process data blocks to make Bitcoin.

"The decline in bitter prices of about $ 6,500 for most of October to less than $ 4,000 is now changing margins even more and even more negative for almost every region, except for low-budget Chinese miners," analysts say . should be distorted largely due to data patches and conservative assumptions of effectiveness. Cost data does not include equipment.

With negative margins, the expected higher producers will be forced to drop, analysts say.

This has not yet happened, and the production shares of miners based in the Czech Republic, the United States and Iceland have risen slightly over the past year or so, JPMorgan said.

If surrendered, other miners can actually see their costs, as they would gain a greater share of bitches for the same amount of energy.

If only cheap Chinese miners remain, marginal costs could fall to less than 1260 dollars for a bird, analysts said.


At the same time, price distortions have also made Bitcoin and other Crimean currencies a rather bad stock of value, or even a hedge of diversification into portfolios, according to John Normand, head of the JPMorgan's mutual assets strategy.

"Even in extreme scenarios such as recession or financial crises, there are more liquid and less sophisticated instruments for transactions, investments and hedges," Norman said in the report.

While Bitcoin's correlation over the past year with all other assets is close to zero, "low correlations have little value if the hedging asset itself is in the bear market," Normand said. Bitcoin fell 74% last year, while the S & P 500 declined by 6.2%.

"If the future really leads to dystopia, then for consistency, investors and corporations need to make wider and deeper preparations than just the acquisition of crypto-lute," he said.

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