bitcoin BTC
-1.85%
According to JPMorgan analysts, prices are expected to fall after the halving as the event is already reflected in current prices.
JPMorgan analysts led by Nikolaos Panigirtzoglou reiterated similar earlier views in a report on Wednesday: “We do not expect Bitcoin prices to rise after the halving, as this is already reflected in the price.” “In fact, we are seeing a downward trend in prices following the Bitcoin halving for a number of reasons,” the analysts said.
These reasons include that Bitcoin remains “overbought,” according to an analysis of Bitcoin futures open interest. Additionally, the price of Bitcoin is still well above JPMorgan’s volatility-adjusted price of $45,000 compared to gold and still higher than the expected cost of production after the halving of $42,000, analysts reiterated.
Despite the cryptocurrency’s resurgence, tepid venture capital funding in the cryptocurrency so far this year could drag down the price of Bitcoin after the halving, analysts say again.
According to The Block’s price page, the current price of Bitcoin is around $61,500.
Bitcoin hashrate is likely to see a ‘significant decline’ after the halving.
The Bitcoin halving event, expected to occur this week, will reduce minting rewards for Bitcoin miners from the current 6.25 BTC per block to 3.125 BTC. Analysts said the decline is expected to impact Bitcoin miners and Bitcoin mining hash rate or computing power.
“With unprofitable Bitcoin miners leaving the Bitcoin network, the hash rate and consolidation among Bitcoin miners, which account for the highest share of listed Bitcoin miners, are likely to occur,” analysts said. “We expect this to fall significantly,” he said, repeating his previous view.
According to analysts, some Bitcoin mining companies may consider diversifying their operations to regions such as Latin America or Africa with lower energy costs after the halving, leveraging inefficient mining equipment for recycling value.
Analysts said it is possible to mine a Bitcoin hard fork cryptocurrency, but that this is “very unlikely” because such equipment is designed specifically for Bitcoin mining. But even if they do so, they will likely still be less profitable due to the cryptocurrency’s significantly lower market capitalization and liquidity compared to Bitcoin, analysts concluded.
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