According to a recent report by JPMorgan Chase, the cost of mining outweighs the price of Bitcoin (BTC). In analyzing the fees associated with making a single coin, the financial firm noted that the average BTC mining costs are $ 4,060. Although a variety of factors are taken into account in the calculation, including the purchase and operation of the equipment required and the time required to mine a coin, Bitcoin has reached a turning point. As the BTC price charts reached only $ 4,090 this year, a cost scenario has been threatening for weeks. Since the price of bitcoin dropped to $ 3,415 in US dollars on February 7, it is now the case that mining coins is not economical.
Bitcoin mining is not commercially viable
For the analysts, the latest news does not show a positive picture. The debate over costs versus value is nothing new for longtime Bitcoin investors. In 2018, the science journal Nature Sustainability published data showing that the energy costs of BTC mining surpassed that of gold and copper. Comparing the $ 1 BTC energy requirements compared to $ 1 in gold, the data showed that the former was twice as expensive. While the facts of the times were indisputable, the problem with these comparisons is that the price of Bitcoin and other cryptos is more volatile than assets like gold and copper.
On the negative side, this means that the downward movements can be more dramatic. The opposite is that prices can rise unexpectedly. Even if coin mining costs currently outweigh the value, things could change quickly. To see how quickly the landscape can change we just have to look back on 2017. From a modest starting point of $ 1,000 at the beginning of the year, 2017 BTC price charts ended just below $ 20,000. Should another catalyst cause a boom, any FUD (dubious doubts about mining) would be forgotten.
Mining does not buy
Another important point is that sensational headlines do not apply to people who want to buy Bitcoin. The average investor does not really care how and where his coins come from. All they really want to know is the price they paid and the current value. Of course, mining issues will increase transaction times, and as we've seen at Ethereum (ETH), this can lead to price volatility. However, these changes are probably not as significant as certain news suggests. Miners who get off due to rising costs will actually make the process more profitable for those who are left. In essence, the process is almost self-regulatory.
Finally, it is worth considering the BTC price in USD since the beginning of 2019. Although the value of the mark is quite limited, the value of the token was relatively stable. Although there were losses, the price has not moved by more than 10%. If we compare the relatively linear path from Bitcoin to that of Ethereum by 2019, we can see that the latter is much more volatile. An increase of 80% in January led analysts to expect a valuation of $ 500 by the end of the year. The value is still relatively high compared to recent months, but the recent increase seems to have been a minipump. For short-term investors, such movements are great. However, Bitcoin seems to have a more stable course, regardless of the debate between cost and value. For long term investors looking for a stable crypto in 2019, evidence suggests that BTC is one of the better options.
* The information in this article is not investment advice.
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The post-mining costs overtake the Bitcoin value, but the BTC price charts remain stable. They were first released on The Independent Republic.
Contribution Source: Mining costs overhaul the Bitcoin value, but BTC price charts remain stable
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