The Bitcoin (CRYPTO: BTC) price is down 1% over the past 24 hours.
The worldâs biggest token by market cap is currently trading for US$21,159 (AU$30,601). Thatâs down 56% year-to-date and down 69% since hitting all-time highs on 10 November last year.
Over the past seven days, the Bitcoin price, notorious for its volatility, has traded in a rather tight range, hitting a low of US$19,848 and a high of US$21,783.
Hereâs why that price level could be of critical importance to crypto miners.
Crypto miners are pressuring the Bitcoin price
No two crypto miners will incur identical costs to mine a token. Smaller operations tend to incur higher costs per token than larger outfits. And the price they pay for their electricity is a major factor, as successful mining entails the use of multiple, energy-hungry computer arrays.
According to Bloomberg reports, investment company Arcane Crypto estimates it costs a big mining company some US$8,000 for each Bitcoin. Thatâs assuming relatively new mining machines and average power prices.
But once you add in overhead costs for infrastructure and interest rates, another company in the crypto space Securitize Capital says it could already be costing some crypto miners more than US$20,000 per token.
Which is right at the level the Bitcoin price has been trading.
Thatâs seeing more miners selling their Bitcoin on exchanges, adding to the ready supply and pressuring the price. And, according to JPMorgan Chase & Co, this could see the Bitcoin price remain under pressure into the third quarter of 2022.
According to JPMorganâs strategists, led by Nikolaos Panigirtzoglou (as quoted by Bloomberg), âOffloading of Bitcoins by miners, in order to meet ongoing costs or to de-lever, could continue into Q3 if their profitability fails to improve.â
They added that the selling âhas likely already weighed on [Bitcoin] prices in May and June, though there is a risk that this pressure could continue”.
The post How crypto miners are squeezing the Bitcoin price appeared first on The Motley Fool Australia.
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More reading
- The Bitcoin price is struggling. When will cryptos see a bottom?
- Why Bitcoin, Ethereum, and Dogecoin are down today
- The ATO is collecting crypto taxes. Here are 5 handy expert tips come tax time
- These 3 cryptos are feeling the Elon Musk effect today
- What to expect from the Bitcoin price following last weekâs thrashing
Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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