A report by JPMorgan suggests that for over four weeks during the fourth quarter, bitcoin’s market price was lower than its mining costs on average.
According to the JPMorgan analysts, the cost of mining bitcoin during Q4 was averaging about $4,060 around the world, Bloomberg reports. According to them, starting late November when the price of bitcoin went below $4,000, it became uneconomical to mine bitcoin.
Chinese miners were the exception though as they incurred lower mining costs. On average Chinese miners spent approximately $2,400 to mine one bitcoin: The drop in Bitcoin prices from around $6,500 throughout much of October to below $4,000 now has increasingly pushed margins further and further negative for just about every region except low-cost Chinese miners.
Bitcoin miners in the world’s second-largest economy achieved this by directly buying electricity from power generators with excess production. Some of these power generators include aluminum smelters.