Nikolaos Panigirtzoglou, a renowned crypto analyst from J.P. Morgan, says the next halving due in the middle of 2024 will be a stress test for BTC miners.
The thing is that the halving will reduce issuance rewards to 3.125 BTC from 6.25 BTC. This means that miners’ revenues will drop and the production cost of digital gold will increase.
Taking into account the average global electricity price of $0.05 per kWh, it takes about $20,000 to mine 1 BTC. At the moment of writing, BTC traded at $30,027. So, after paying electricity bills, miners will earn some $10,000 from each coin sold.
Should the electricity cost increase by at least $0.01, the BTC production cost would swell by $4,300. After the 2024 halving, the cost would double to $8,600. Therefore, a higher electricity bill would have a double effect on miners’ incomes.
Nikolaos Panigirtzoglou believes that the minimum price of digital gold will depend primarily on its production cost. This means that the inevitable increase in the electricity cost will trigger a steady rise in BTC quotes.
Thus, if crypto miners pay $0.10 more for electricity, BTC will trade at around $37,200.
