JPMorgan Chase: Bitcoin Price Decline Amid Soaring Electricity Prices Leads to Market Pressure from High-Cost Miners

December 5 — A JPMorgan analyst says MicroStrategy (stock ticker MSTR) resilience matters more than miner activity for Bitcoin’s recent price trend. While the world’s largest Bitcoin holder hasn’t started selling, miners are facing growing selling pressure. In a Wednesday report, JPMorgan Managing Director Nikolaos Panigirtzoglou and his team noted Bitcoin’s recent sustained price pressure stems from two factors: the recent drop in the Bitcoin network’s hash rate and mining difficulty, and latest developments around MicroStrategy. The analyst explained the hash rate and difficulty decline reflects two forces: China reaffirming its Bitcoin mining ban after a surge in private mining activity, and falling Bitcoin prices plus high energy costs squeezing profits—pushing high-cost miners outside China to exit the market. “While a hash rate drop typically boosts miners’ revenue, Bitcoin’s price is still hovering below its production cost,” the analyst said, adding this has created selling pressure in the Bitcoin market. JPMorgan has revised its estimated Bitcoin production cost down to $90,000, down from $94,000 last month. The update assumes a $0.05 per kWh electricity price; for high-cost producers, every $0.01 increase in electricity prices lifts their production cost by $18,000. “Against a backdrop of high electricity prices and falling Bitcoin prices squeezing profits, some high-cost miners have been forced to sell Bitcoin in recent weeks,” the JPMorgan report stated.