It costs more to mine bitcoin than to buy it
The drop in bitcoin prices from about $6,500 to below $4,000 now has pushed margins further and further negative for almost every region except low-cost Chinese miners, JPMorgan Chase says
Hong Kong — The production-weighted cash cost to create one bitcoin averaged about $4,060 globally in the fourth quarter, according to analysts with JPMorgan Chase. With bitcoin itself currently trading below $3,600, that doesn’t look like such a good deal. However, there’s a big spread around the average, meaning that there are clear winners and losers. Low-cost Chinese miners are able to pay much less — the estimate is about $2,400 per bitcoin — by leveraging direct power purchasing agreements with electricity generators such as aluminium smelters looking to sell excess power generation, JPMorgan analysts led by Natasha Kaneva said in a wide-ranging January 24 report about cryptocurrencies spearheaded by Joyce Chang. Electricity tends to be the biggest cost for miners, needed to run the high-powered computer rigs used to process data blocks to earn bitcoin. “The drop in bitcoin prices from around $6,500 throughout much of October to below $4,000 now has increasingly pushed margins...
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