The current Bitcoin production cost falls to around $18,000 with the new methodology vs. $21,000 with the old methodology.
The CBECI’s adjustments have a broader impact than simply changing estimates. Analysts have discovered that changes in electricity costs can significantly reduce the cost of producing 1 Bitcoin.
With the new CBECI methodology, this sensitivity has decreased slightly to approximately $3,800, compared to the previous $4,300 change for every one cent per kWh (kilowatt hour).
According to the analyst, this sensitivity is expected to double after the 2024 halving event, which will decrease miners’ rewards by half. This change will amplify the importance of cost management due to the higher impact of electricity costs on the overall mining expenses.
The top crypto currently trades for $25,902 at the time of writing, up by nearly 1% in the past day. Over the past month, more than $70 billion has been erased from the asset’s market cap.
Bitcoin has seen its trading volume fall from a high of $14 billion last Wednesday to as low as $3.5 billion yesterday and $8 billion in the past 24 hours. This is a significant plunge compared to the daily trading volume of more than $15 billion recorded early last month.
Featured image from iStock, Chart from TradingView