JPMorgan analysts are taking jabs at Bitcoin once more. The executives at this major US bank have never been fond of digital currency and blockchain technology. Jamie Dimon, JPMorgan’s CEO, temporarily pulled back on his comments when BTC hit its all-time highs. Shortly after, the coin began to crash, and his skepticism picked up again.
According to a Bloomberg report, the bank’s analysts say that it costs more to create one Bitcoin than it’s worth. In Q4 2018, it cost around $4,060 to mine one BTC and currently, the price of the digital currency is $3,584.07.
Not all miners are paying that top dollar to mine though. Low-cost Chinese miners can pay much less, mining at around $2,400. Natasha Keneva was one of the JPMorgan analysts that released their cryptocurrency report to major news outlets. She claims that these low-cost miners leverage direct purchasing agreements with electricity generators that are looking to sell excess power.
On top of the price, the bank as a whole believes that the true value of digital currencies like BTC is still unproven. The analyst said:
“Even in extreme scenarios such as a recession or financial crises, there are more liquid and less-complicated instruments for transacting, investing and hedging.”
The cryptocurrency market has been steadily awaiting the flood of Wall Street investments that haven’t occurred on a large-scale like some would have hoped. Bitcoin futures, OTC trading desks, and the hope of Bitcoin ETFs were made to entice pension funds and asset managers, but none have budged.
The prices of digital currencies rose towards the end of December but have quickly corrected, and all gains are almost lost once more. The JPMorgan analysts say that marketplaces, where individuals and small businesses have control over payment methods, would be the most useful for the spread of digital currencies. However, these analysts feel its volatility, propensity for illicit use, and security flaws should all be considered.
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