JPMorgan Chase & Co. have claimed that Bitcoin is no longer a profitable crypto that can be mined and only those operating with low-cost technology – like Chinese miners, are the only one’s still benefiting from it’s mining.
Analysts at JPMorgan Chase & Co. found that the cost of mining one Bitcoin (BTC) token was averaging $4000 worldwide in the last quarter of 2018.
The BTC token, trading at $3483.89 at the time of writing, has seen a drastic fall in 2018, with the same cryptocurrency trading above $10000 this time around last year.
To continue mining operations, anyone operating on the average cost of mining a BTC token ($4000), would still be on the losing side, with a loss of around $500 per token mined.
The New Winners
The decline of bitcoin, however, is still not concerning those employing the most cost-effective mining operations, as they can still be able to make sizeable profits.
According to a report on the subject by Bloomberg, Chinese miners in possession of low-cost mining tech. are able to mine bitcoins at an estimated $2400 per bitcoin, which is significantly less than the global average.
The report states that the reason they have managed to do so is by directly engaging in agreements with power generators, which makes them come out on top.
The analysts are of the opinion that due to such unbearable costs, most bitcoin producers would abandon future mining endeavors.
Still, Mining Activities Are on the Rise
There are reports that even during the cryptocurrency’s steady decline, bitcoin’s hash rate has been on the rise after a previous low was reported in December last year.
This could also be due to the fact that despite the negative bubble surrounding bitcoin’s economy, mining activities have been on the rise in different parts of the world.
In a statement quoting the analysts:
“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.”
The analysts also predict that Chinese miners could potentially drop their mining operations to a achieve production price of $1,260 per bitcoin.
As reported by Altcoinera, recently the Grant Public Utility Department (PUD) in Wasington, decided to hike the electricity costs for mining operations against which the 9 crypto firms filed a suit.