A recent analysis made by JPMorgan Chase & Co. has come up with a very tragic information: when you average the cost of mining Bitcoin globally, it costs about $4,060 USD to mine 1 Bitcoin (BTC). However, BTC is currently trading at $3,600 USD. The conclusion? Mining Bitcoin is not profitable anymore.

However, before you freak out, you should focus on the word “average”. There are clear winners and losers in this scenario and what the research actually shows is that mining has become unprofitable in most places, but it can still be made on some others.

For instance, the most low-cost Chinese miners are paying only $2,400 USD per token and their business is still going strong. Try to mine Bitcoin paying normal rates in New York, though, and you will be literally paying to mine.

The report, which was spearheaded by Natasha Kaneva and Joyce Chang, explicit two obvious things: electricity is the bigger cost for miners and the bear market have taken its toll. Because of the need to use highly powerful computers in order to mine the BTC blocks, energy costs are high in most areas of the world.

Except for low-cost Chinese miners and big companies that receive any kind of help from governments, it looks like mining is not very profitable. The study does not take the price of the equipment into account, which makes the return on investment be even lower now.

More miners will have to drop out soon as costs are too high for the small profits. However, more and more people mine at Iceland and the Czech Republic, for instance, which is probably due to the fact that, despite the prices not being so low in these countries, the government actually backs mining and give the companies discounts.

This is a resistence game, though. As there are less and less miners in the world, the cost for mining will be diminished. This means that the low-cost Chinese miners and the ones receiving outside help will get even more profits after the other miners are forced out of the industry. Unfortunately, this centralized the Bitcoin industry.

Unfortunately, cryptocurrencies have become a poor store of value last year as their prices went down. John Normand, from JPMorgan, believes that in extreme cases such as financial crises, Bitcoin is still not a great idea.

What will happen to Bitcoin? The report may make you think that the market is doomed, but the truth is far from that. Fortunately, the crypto market is always bursting with innovation, so time helps to solve most problems even as the industry faces criticism among economists.

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