JPMorgan Report Unveils Critical Bitcoin (BTC) Price Level Essential for Miner Profitability

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• JPMorgan, the world’s largest bank, has released significant evaluations regarding Bitcoin prices.
• According to a research report published today by JPMorgan, the current hashrate and power consumption of the Bitcoin network indicate a significant drop in estimated mining costs to about $45,000 from the previous $50,000.
• “The term ‘hashrate’ refers to the total combined computational power used to mine and process transactions on a proof-of-work blockchain,” the report highlights.

This article delves into JPMorgan’s latest insights on Bitcoin’s mining costs and the implications of the new Runes protocol on the cryptocurrency’s network.

Impact of Halving on Bitcoin’s Hashrate

The report notes a significant prediction by JPMorgan that the halving event, which reduces miner rewards by 50% thereby slowing the rate of new Bitcoin entering the market, would lead to a drop in hashrate. This prediction has begun to materialize, albeit slightly delayed.

Introduction of the Runes Protocol

The Runes protocol, a new form of token generation on the BTC network, was initiated shortly after the halving event, providing temporary support to miner revenue through increased transaction fees. This helped compensate for the reduction in new BTC issuance rewards due to the halving.

Short-lived Support from Runes Protocol

However, the support from the Runes protocol was short-lived, as activity and fees associated with this protocol significantly decreased in the past one or two weeks. This has increased the ongoing challenge for Bitcoin miners to maintain a sustainable income source in the post-halving environment.

Future Outlook for Bitcoin Mining and Price Correlation

The report also emphasizes a feedback loop related to BTC price, where a lower Bitcoin price increases the pressure on unprofitable miners to exit the network, thereby reducing the hashrate and mining costs further.

Conclusion

JPMorgan forecasts limited upside for BTC in the near term due to various identified barriers, including a lack of positive catalysts and a decrease in buying interest from individual investors. This analysis provides a comprehensive view of the current challenges and dynamics within the Bitcoin mining industry.

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