Only miners with low electricity costs and sustainable configurations will survive: JP Morgan | CoinDesk JAPAN | Coin Desk Japan

Bitcoin (BTC) miners with lower electricity bills and a more sustainable energy mix are the only operators likely to survive in an increasingly competitive environment, according to a June 22 study by JPMorgan. said in the report.

According to the report, the main cost of mining is electricity, which affects the overall cost of Bitcoin production.

Electricity prices have fallen, especially in the US, where most bitcoin mining companies are based, and the US is the largest contributor to bitcoin hashrate, the bank said. Hashrate is the total computing power used for mining and transaction processing on a proof-of-work blockchain like Bitcoin.

JPMorgan analysts led by Nikolaos Panigirtzoglou said, “Lower power costs should help limit the rise in Bitcoin production costs in the current phase of rising hashrates. ‘ writes.

Power costs played a key role in the 2022 bear market as miners struggled to survive, the bank said.

While the average price of electricity for bitcoin miners globally is around $0.05 per kilowatt hour (kWh), some major mining companies are achieving costs as low as $0.03 per kWh, the report said.

Declining power costs have helped major Bitcoin miners keep their Bitcoin production costs down and “maintain profitability in the current competitive environment, where hash rates are skyrocketing and hitting all-time highs.” There are,” the report added.

“Vulnerable” miners such as Core Scientific, Argo Blockchain, and Iris Energy are expected to experience “falling Bitcoin prices, rising debt service costs, electricity bills, etc.” struggled to survive by a “rising combination of In fact, miners with high electricity bills have faced losses over the past year due to the falling Bitcoin price.

JP Morgan believes that over time the Bitcoin mining industry will consolidate and become more competitive as a result.

The report also says miners are looking to diversify their power mix with renewable sources to be more environmentally friendly.

｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
｜Image: Shutterstock
｜Original: Only Bitcoin Miners With Low Power Costs and High Sustainable Energy Mix Will Survive: JPMorgan