According to a report from The Block, JPMorgan analysts predict that the price of Bitcoin will decline after the halving event, as this event is already reflected in the current price. The reasons for this include Bitcoin still being in an “overbought state” based on analysis of Bitcoin futures open interest (OI). Furthermore, analysts reiterate that the price of Bitcoin remains significantly higher than JPMorgan’s volatility-adjusted price of $45,000 and still above the expected production cost of $42,000 after the halving.
Analysts also emphasize that despite the cryptocurrency market’s recovery, lukewarm investment in cryptocurrencies this year may also weigh on the price of Bitcoin after the halving.
The halving event may lead to a substantial decrease in Bitcoin’s hash rate. According to data from CoinMarketCap, the upcoming halving event is expected to occur this Saturday (April 20th) Taiwan time, reducing the block reward from the current 6.25 BTC to 3.125 BTC. JPMorgan analysts state that this reduction is expected to impact Bitcoin miners and Bitcoin mining hash rate.
Analysts state that after the halving, some Bitcoin mining companies may consider diversifying their operations to regions with lower energy costs, such as Latin America or Africa, in order to repurpose their inefficient mining machines for residual value.
Analysts also mention the possibility of mining Bitcoin hard-fork cryptocurrencies, but consider this possibility to be low since these mining machines are specifically designed for mining Bitcoin. Even if miners do so, they are likely to remain unprofitable due to the lower market value and liquidity of these cryptocurrencies compared to Bitcoin.
