JPMorgan Highlights $85,000 as Key Bitcoin Cost Line

CoinDesk reports:

JPMorgan stated that the approximate $85,000 average production cost of Bitcoin is a key level for the current market to watch. The bank believes this level can be viewed as Bitcoin’s “soft bottom,” as it directly impacts miners’ operational pressures and their pace of selling held coins.

Bitcoin previously remained below this production cost range for 280 consecutive days, only briefly reclaiming the level this week before rebounding. However, BTC has since retreated to around $84,000, falling back below this cost line.

Why is the cost line important?

J.P. Morgan noted that when Bitcoin prices fall below the average production cost, less efficient miners face greater pressure and may need to sell more of their Bitcoin reserves to cover operational expenses. Conversely, if prices return above the cost line, miners' cash flow pressures will ease, providing the market with additional breathing room.

This is also why the bank considers $85,000 significant. However, briefly surpassing this level is not enough to improve miners' circumstances. For a more noticeable improvement, Bitcoin needs to sustain this price or higher for an extended period.

The sustainability of the rebound remains to be seen.