Analysts at JPMorgan do not expect an increase in the price of BTC after the Bitcoin halving, arguing that the event is already priced in. They predict a significant drop in the hashrate due to the departure of unprofitable Bitcoin miners after the mining rewards are reduced from 6.25 BTC to 3.125 BTC per block. According to JPMorgan analysts, the price of BTC is even expected to continue falling after the Bitcoin halving for several reasons.
According to JPMorgan analysts, the price of BTC is likely to drop after the upcoming Bitcoin Halving, as they believe this event is already priced into the current market. Nikolaos Panigirtzoglou, head of the analyst team, stated that despite common expectations, JPMorgan does not anticipate a price increase following the halving.
We do not expect the price of BTC to increase after the Bitcoin halving, as it has already been priced in. In fact, we anticipate a drop in the bitcoin price after the halving, and there are several reasons for this.
Nikolaos Panigirtzoglou and JPMorgan analysts
Risks of a Potential BTC Price Drop after the Bitcoin Halving
JPMorgan analysts have identified several reasons why the BTC price could experience a decline after the Bitcoin halving. Firstly, Bitcoin is still in overbought conditions, based on an analysis of open interest on BTC futures. Additionally, the current price of Bitcoin, around $61,700, is much higher than the volatility-adjusted price of $45,000 compared to gold, and it remains above the estimated post-halving production cost of $42,000.
Impact of the Bitcoin Halving on Hashrate
The Bitcoin halving will reduce rewards for Bitcoin miners from 6.25 BTC per block to 3.125 BTC. This reduction is expected to significantly impact Bitcoin miners and the hashrate, or computing power, of the blockchain. Analysts anticipate that unprofitable Bitcoin miners will exit the network, resulting in a notable decline in hashrate and consolidation among Bitcoin miners, with increased market share for publicly traded mining firms.
Miners’ Strategies Following the Bitcoin Halving
After the Bitcoin halving, it is likely that some mining companies will consider diversifying to regions with lower energy costs, such as Latin America or Africa, in order to repurpose their less efficient mining equipment for salvage value. Although these miners may consider mining crypto coins derived from Bitcoin forks, JPMorgan analysts consider this to be highly unlikely, as the equipment is specifically designed for Bitcoin mining. Even if they were to pursue this path, they would likely remain unprofitable due to the significantly lower market capitalization and liquidity of these cryptocurrencies compared to Bitcoin.
