CMC News

#Strategy Balance Sheet Key to Bitcoin Price, Says JPMorgan

#JPMorgan analysts have identified Strategy's financial resilience as the main driver of BTC$BTC near-term direction, outweighing miner activity. The firm's ability to avoid selling Bitcoin matters more than hash rate declines or mining difficulty changes.

Managing director Nikolaos Panigirtzoglou led analysts who cited two pressure factors on BTC$BTC's price in a Wednesday report. The Bitcoin network hash rate and mining difficulty declined recently while developments around Strategy's balance sheet drew market attention.

Hash rate and difficulty declines reflect China reiterating its mining ban after private activity surged, plus high-cost miners outside China retreating as prices and energy costs squeeze profits. BTC$BTC price continues to hover below production cost, creating sell pressure on the #cryptocurrency.

JPMorgan now estimates #Bitcoin production cost at $90,000, down from $94,000 last month. The estimate assumes electricity at $0.05 per kilowatt-hour, with each $0.01 increase raising production cost by $18,000 for higher-cost producers.

High-cost miners faced forced Bitcoin sales in recent weeks as profits squeezed amid elevated electricity costs and lower prices. Strategy's enterprise-value-to-Bitcoin-holdings ratio currently stands at 1.13, after declining sharply in the second half of this year.