Bitcoin halving is just hours away, and there is widespread concern due to the recent price drop. Expectations are that the decline may continue post-halving. Reports are inevitably heightening investor anxieties. Today, a report has come from JPMorgan. Let’s look into the details of the report.
New Bitcoin Report from Wall Street Giant JPMorgan
Wall Street giant JPMorgan (JPM), in its latest research report, suggested that the Bitcoin price could weaken due to the effects of the reward halving. The research report indicated that the reward halving event, expected around April 19-20, could lead to a potential drop in Bitcoin (BTC) prices.
The bank, based on its analysis of open interest in Bitcoin futures, observed that the market is still in overbought conditions. This situation indicates that prices for the world’s largest cryptocurrency could trend downward.
Bank’s Set Level for Cryptocurrency BTC
The current Bitcoin price, approximately $61,495, is still above the bank’s volatility-adjusted gold comparison level of $45,000 and the post-halving estimated production cost of $42,000. Historically, the production cost of Bitcoin has formed a lower limit for the cryptocurrency BTC price.
JPMorgan also noted in its report that despite recent revitalization in the cryptocurrency market, venture capital funds remain stagnant. Particularly, mining companies are expected to feel the effects of the halving. Analysts expect a significant decrease in hash power and consolidation among public Bitcoin miners as unprofitable Bitcoin miners exit the network.
Post-Halving Bitcoin Mining Companies
The authors of the report also predicted that some Bitcoin mining firms, post-halving, might turn to regions with lower energy costs and utilize inefficient mining equipment.
JPMorgan’s analysis carries an expectation of weakening in Bitcoin prices, while emphasizing the need to closely monitor future developments related to the cryptocurrency. A decline in Bitcoin prices has the potential to impact the entire cryptocurrency world. Looking at the flagship of cryptocurrencies, Bitcoin, we see it trading at $61,418 at the time of writing, showing some recovery from yesterday’s drop.
