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Why does JP Morgan think that bitcoin miners continue to sell bitcoin till Q3?

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To eliminate the possibility of liquidating and breaking even the losses, major bitcoin miner firms have seen to sell their bitcoin

Amidst the crypto market crash, the circumstances came down to this where even the prestigious bitcoin miners had to sell their bitcoins in order to minimize their losses. Seems like this trend could move further where bitcoin miners would need to sell their crypto assets to get going given the price drops in bitcoin (BTC).

As per the analysts from JP Morgan, many publicly listed bitcoin miner firms have reported selling their bitcoin (BTC) in the months of May and June. There were many reasons for bitcoin miners to do so including meeting the production costs, reducing their debts and increasing their liquidity, etc. About 20% of overall bitcoin miners make public listed miners. 

Not just this, JP Morgan analysts also forecasted at the same time that privately-held bitcoin mining firms could also have sold a significant amount of bitcoins from their bitcoin (BTC) holdings in order to deal with the ongoing costs. Moreover, analysts believe that the selling of bitcoins by bitcoin miners could even continue to the third quarter considering if the value of BTC did not improve. 

Analysts said that selling off of bitcoin by bitcoin miners for various reasons including meeting current costs or decreasing the debt amount, could continue even till Q3 if the profitability of bitcoin mining firms fails to improve in upcoming times. 

However, on the positive side, JP Morgan analysts stated that production costs of bitcoin had seen a drop where it was an average range of $18K to $20K that could go as low as $15K. The drop in production cost is seen as the result of mining hardware’s improved energy efficiency and the same could assist miners in maintaining their profitability. 

In another analysis by Bloomberg’s team, it has been said that the consistent downturn in the crypto market is putting extra stress on loans that bitcoin miners have taken, worth $4 billion and they are collateralized against their equipment. Further, the report also explained that an increasing number of loans are underwater for now and so far, a few miners have even reported defaulting on their loans. 

ALSO READ: Largest Hispanic Supermarket Chain In 3 U.S States To Have Crypto ATMs

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