Bitcoin mining network becoming more sensitive to price swings, JPMorgan says
JPMorgan analysts report that the Bitcoin mining network has become increasingly sensitive to price fluctuations due to mining costs exceeding market prices. This trend has led to decreased profitability and increased liquidation of Bitcoin holdings by miners.
Why it matters
Increased sensitivity in mining economics can lead to greater volatility in the Bitcoin network and broader cryptocurrency markets.
The bank said bitcoin s hashrate and mining difficulty have become noticeably more responsive to changes in the cryptocurrency s price this year. Over the past six months, the beta of mining difficulty relative to BTC price moves has climbed to 0.62, a sign that the network s computing power is reacting more quickly to market conditions.
The article reports on financial analysis and market data without editorializing.
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