According to a research report by Wall Street giant JPMorgan (JPM), the bitcoin (BTC) price is likely to weaken after the halving event, scheduled to occur on April 19-20.
JP Morgan aurthor predicts a drop in Bitcoin’s price post-halving, citing high demand in futures markets as a sign of overbuying. The current Bitcoin price of around $61,200 is above JPMorgan’s volatility-adjusted comparison with gold, which sets it at $45,000, and the projected production cost of $42,000 after the halving.
Historically, the bitcoin production cost has acted as a lower boundary for BTC prices. JPMorgan also notes that venture capital funding remains subdued despite the recent crypto market resurgence.
The halving’s most significant impact will be felt by mining companies, with the bank anticipating a “significant drop in the hashrate and consolidation among bitcoin miners.” The report indicates that mining companies might use old rigs in low-cost energy areas like Latin America or Africa to extract remaining value.
JPMorgan had previously cautioned investors that the bitcoin price could fall to $42,000 after the April halving event, explaining that $42,000 is the level they “envisage bitcoin prices drifting towards once bitcoin-halving-induced euphoria subsides after April.” The bank also recently stated that the bitcoin halving and the next major Ethereum upgrade are “largely priced in.”
Also Read: Top Bitcoin Miners Halt Sales Despite Bitcoin Halving.
