JPMorgan Identifies Critical Price Level for Bitcoin Miners at $85,000
JPMorgan analysts have identified a critical price level for Bitcoin miners, which is around $85,000. This estimate was made by Nikolaos Panigirtzoglou and his team in a September 23 note. They referred to this level as a 'soft floor' for the market.
The analysts pointed out that Bitcoin spent 280 days below this price, causing financial difficulties for miners. However, with BTC briefly climbing up to $87,000 earlier this week, relief has been provided to these individuals.
JPMorgan's estimate is based on their analysis of Bitcoin's production cost, which they believe to be around $84,948. The bank's analysts also noted that the implied Bitcoin cost of production vs. BTC price had fallen by 19% from its October peak, and mining difficulty dropped roughly 15%.
As a result of higher-cost miners switching off machines and searching for cheaper power, some redirected capacity toward AI workloads. The analysts at JPMorgan believe that this new backdrop should provide relief to bitcoin miners, thus reducing the risk of forced selling by them.