The industry and other prominent cryptocurrencies saw a tremendous increase in 2021. However, the year 2022 hasn’t been the same for them. Currently, they are on the verge of going down. Initially, the market was going down because of the flood of several new coins. Investors gave their money into such new crypto ventures, which eventually led to losses. Currently, the industry is going through a severe fall in which inflation plays a crucial role. Several other macroeconomic factors are also responsible for the doom of cryptocurrency right now.
The crypto market has similar work to the stock market. This also brings the fluctuating nature into perspective. That’s why the investors are facing severe issues. This has confused the investors and individuals involved in the crypto industry. Such issues are causing detrimental effects on the crypto industry. For example, the production cost of Bitcoin was around US $20,000 initially in June. However, now it has come down to US $13,000. As per the speculations of investment bank JP Morgan, such trends are not healthy for the crypto market. This will lead to bearish market trends, which is not beneficial for the industry.
The reason behind the low production cost of Bitcoin
Several strategists of JP Morgan bank, including Nikolaos Panigirtzoglou, heads said that this sudden drop in production cost is because of the low consumption of electricity which the Cambridge Bitcoin Electricity Consumption Index marked. Bitcoin’s hash rate is also changing; however, the clear low hasn’t come yet. However, if Bitcoin increases again, the selling pressure will decrease on the miners. It will also reduce the pressure on the investors leading to reduced financial risk. However, the current changes in the product price say otherwise. It will discourage the investors from not indulging in more BTC token trading.
Several crypto businesses have recently declared bankruptcy. That’s why investors need to be careful about buying new crypto assets. However, a few intelligent investors think otherwise.
