JPMorgan lowered its bitcoin production cost estimate to $18,000 from $21,000, as the Cambridge Centre for Alternative Finance has retroactively revised the production cost for Bitcoin miners after a methodology update.
The research institute prepares the Cambridge Bitcoin Electricity Consumption Index (CBECI), which provides a top-down approach for estimating the electricity consumption for the Bitcoin network.
The investment bank incorporates the CBECI into its model for calculating the Bitcoin production cost — which it says acts as the lower boundary of Bitcoin’s price range. Basically, a price floor, since miners will look to sell at or above this level. The lowering production cost hence is negative for Bitcoin price.
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