Bitcoin (BTC) miners with low electricity costs and a high sustainable energy mix are the only ones likely to survive in a progressively more competitive environment, JPMorgan (JPM) said in a research report Thursday.

The main cost in mining is electricity, which affects the overall cost of bitcoin production, the report said, adding that miners have been looking for cheaper and sustainable energy sources to protect their profitability.

Electricity prices have been falling, especially in the U.S., where most bitcoin mining firms are based, the bank said, noting that the U.S. is the largest bitcoin hashrate contributor. Hashrate refers to the total combined computational power used to mine and process transactions on a proof-of-work blockchain such as Bitcoin.

“Lower electricity costs should help contain the rise in the bitcoin production cost in the current phase of rising hashrate,” analysts led by Nikolaos Panigirtzoglou wrote.

The cost of power has played a vital role in the bear market of the past year as miners struggled to survive, the bank said.

The average price of electricity for bitcoin miners globally is about $0.05 per kilowatt hour (kWh), however, some large mining firms have been able to pay as little as $0.03/kWh, the note said.

Lower electricity costs help the large bitcoin miners keep bitcoin production costs down and “maintain their profitability even in the current highly competitive environment, where the hashrate has risen steeply making new record highs,” the note added.

“Vulnerable” miners, including Core Scientific (CORZQ), Argo Blockchain (ARB) and Iris Energy (IREN) have struggled to survive due to a “combination of falling bitcoin prices, rising debt servicing costs and rising electricity costs,” the analysts wrote. Miners with higher electricity costs have been facing losses due to falling bitcoin prices over the past year.

JPMorgan says that over time the bitcoin mining industry will consolidate and become more competitive because only miners with lower production costs will be able to survive.

Miners have also been trying to diversify their power mix with renewable sources in order to become more environmentally friendly, the report said.

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