JPMorgan has lowered its bitcoin manufacturing price estimate following current 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 previous methodology,” JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a report on Wednesday. Accordingly, electrical energy value modifications will now have a smaller impact on bitcoin mining prices, the analysts famous.
The present market value of bitcoin is round $25,800, in line with CoinGecko information.
“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 mentioned.
“This sensitivity would mechanically double publish the 2024 halving occasion,” they added.
That is as a result of the upcoming bitcoin halving occasion will reduce the rewards miners obtain in half, and any modifications in electrical energy prices can have a bigger affect on their total bills, making price administration much more important for miners.
JPMorgan reiterated Wednesday that the halving occasion may very well 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 boost 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 tools 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 tools or function a mixture of numerous machines with differing efficiencies.
“In conclusion, we performed this evaluation to check our speculation that will increase in community hash charge can probably be attributed to extra lately launched mining {hardware},” the Cambridge Centre for Various Finance mentioned. “This speculation was primarily based on U.S. import information, and we sought further proof to validate it.”
