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Bitcoin faces 'several' headwinds that will challenge miners in near term, says JPMorgan

Bitcoin faces 'several' headwinds that will challenge miners in near term, says JPMorgan
Unprofitable bitcoin miners are starting to exit the network after the halving, as expected. Those remaining face some near-term challenges.

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Unprofitable Bitcoin miners are beginning to exit the network following the recent halving, providing relief to remaining miners as it reduces the cost of producing a single Bitcoin. However, JPMorgan's Nikolaos Panigirtzoglou warns that Bitcoin still faces several near-term challenges. The current hashrate and power consumption put the central estimate of Bitcoin production cost at around $45,000, well below the current price of $66,000. JPMorgan also notes that Bitcoin prices are overbought and above the volatility-adjusted comparison to gold. Additionally, there has been limited inflow into Bitcoin ETFs and lackluster demand following Hong Kong's approval of spot Bitcoin and Ether ETFs. The reduction in Bitcoin's hash rate, due to some miners exiting the network, was expected after the halving in April. This highlights the ongoing challenge faced by Bitcoin miners to maintain a sustainable source of revenue, especially in the post-halving environment. With the price of Bitcoin trading between $60,000 and $70,000 since March, miners are facing pressure to leave the network. The recent halving slashed mining rewards, adding to the challenges faced by miners. As a result, the decline in Bitcoin prices could lead to more unprofitable miners leaving the network, further impacting the hash rate and Bitcoin production cost.