JPMorgan increases its estimate for the cost of producing a bitcoin to $45,000, seen as a surprising shift in the mining landscape after the halving in May 2024. An increase in the amount comes after the initial projection of a cost of $42,000 by the investment bank in February, expecting costly transactions of a high short-term surge.
“We previously anticipated a significant drop in hashrate post-halving as unprofitable miners exit the bitcoin network,” explained Nikolaos Panigirtzoglou, lead analyst for the report. “This appears to be happening, albeit with some delay.”
Hashrate is a key crypto term that reflects the combined computational power allocated to guarding the structure of Bitcoin. A low rate is supposed to indicate fewer miners and fewer resources but creates room for the mining of new coins while weakening the security of the network.
Initially, JPMorgan predicted a heavy fall in hashrate, but that has been averted. Some miners that are not as efficient have indeed disappeared, but the overall hashrate hasn’t changed that much. This fact, as added to a steady consumption of dead power, has raised the production cost by a couple of dollars and stationed it at $45,000.
Bitcoin’s Evolving Volatility Trends in 2024
Bitcoin has long been the subject of criticism due to its notorious volatility, with detractors dismissing it as a mere speculative asset. However, recent data and analysis challenge this perception. A chart by Alex Thorn reveals that BTC’s 30-day volatility is comparable to top-performing US stocks, suggesting that volatility isn’t inherently negative.
The volatility of the SPY index is often lower, but this is partly due to the contrasting performances within its components—the outperforming “Magnificent-7” stocks versus the underperforming “Not-so-Magnificent-493.” This comparison helps contextualize Bitcoin’s volatility within broader market dynamics.
Bitcoin’s market behavior is evolving. Historically, its bull markets are characterized by sharp, rapid price increases, while bear markets tend to be prolonged and gradual, with volatility decreasing during downturns. Along with increases in the stock market volatility during market falls, BTC’s volatility decreases.
The peak levels of Bitcoin’s realized volatility have been decreasing over time. In 2024, Bitcoin’s volatility ranged between 40% and 60%, significantly lower than in previous bull runs in 2017 and 2021. This trend suggests a maturing market.
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