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A large part of the cost of mining bitcoins on a global scale associated with the energy costs required to operate huge, powerful and demanding of computers.
Cryptocurrencies such as bitcoin have the trend of significant fluctuations in the value / photo UNIAN

Analysts at JPMorgan Chase & Co have found that the cost of mining one bitcoin exceeds the actual cost of the cryptocurrency.

Thus, in the fourth quarter of 2018 world average cost of production of bitcoin has fluctuated at around 4060 dollars, well above its fair value, transfers Naked Science with reference to Bloomberg.

A large part of the cost of mining bitcoins on a global scale associated with the energy costs required to operate huge, powerful and demanding of computers.

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Bitcoin miners in China have found ways to significantly reduce these costs by opening up production in the vicinity of energy producers, concluded with them a number of agreements on direct procurement of the desired resource. According to analysts from JPMorgan, which allows them on average to pay “only” about 2400 dollars for bitcoin.

However, despite the growing costs, many Western bitcoin miners still have not announced the termination of production. On the contrary, the experts found that in some countries, the production shares of miners, based in the Czech Republic, the USA and Iceland increased slightly.

According to analysts, if “in” will remain the only Chinese miners with low costs, marginal costs could fall to less than 1260 dollars per bitcoin. However, despite some pessimism, cryptocurrencies such as bitcoin have the trend of significant fluctuations in value over short periods of time – it’s what makes them so unpopular among traditional banks.


Price graph of bitcoin / Bloomberg

At that time, as the correlation of bitcoin over the past year with all the other assets was close to zero, this indicator of nothing says, if he hedged asset (financial assets or products are available) is “bear” market, which is characterized by a decrease of prices or quotes, says John Normand, head of cross asset strategy at JPMorgan. He stressed that the bitcoin last year fell by 74 percent, while the S&P 500 index fell 6.2 percent.

According to Normand, in the future, investors and corporations need to prepare for a broader and more thorough preparation to better coordinate their actions and develop an elaborate strategy than the simple acquisition of cryptocurrency.