Bitcoin Mining Costs Now Exceeds Its Worth: JP Morgan

Bitcoin mining price

In 2018, we saw cryptocurrencies taking a hit after an overly impressive 2017. JP Morgan reports that the cost of mining one Bitcoin is now worth more than its value.

In the fourth quarter, the cost of mining a Bitcoin averaged around $4,060 while the trading cost is $3,600. However, there is a varied range for which a Bitcoin can be mined. For example, Chinese miners can get a Bitcoin by spending just $2,400 in the mining process.

Electricity consumption is one of the biggest factors for the high cost of mining as a lot of electricity is required to power high-performance computers. China’s low-cost miners benefit from direct power purchasing agreements with electricity generators.

According to a JP Morgan analyst, “the drop in Bitcoin prices from around $6,500 throughout much of October to below $4,000 now has increasingly pushed margins further and further negative for just about every region except low-cost Chinese miners.”

With declining profits, miners, other than China-based, will be forced to abandon the business. However, studies show that production shares of cryptominers in the Czech Republic, Iceland, and the U.S. have witnessed a slight increase over the past year.

Compared to other assets, Bitcoin’s correlation is nearly zero. While S&P 500 saw a decline of just 6.2%, Bitcoin tanked as much as 74%.

Cryptocurrencies are not a favorable asset now if you are planning to invest and build a portfolio. Predictions say that 2019 could be another flat year for digital currencies.

Where do you think Bitcoin strayed from its successful path? Tell us in the comments below.

Also Read: Torrent Site ‘Promotion’ Boosts Post-Release Box Office Revenue: Study

Similar Posts