JPMorgan believes that the price of Bitcoin has already “priced in” the halving and anticipates a decline

  • Analysts at JPMorgan caution that following this week’s halving event, the price of Bitcoin may decline.
  • Analysts predict that the hash rate of Bitcoin mining will also drop dramatically after the halving.

JPMorgan analysts predict that the price of Bitcoin will drop after the halving since the event has already been included into the existing pricing.

Reiterating their earlier identical opinions, JPMorgan analysts lead by Nikolaos Panigirtzoglou stated in a research on Wednesday, “We do not expect bitcoin price increases post-halving as it has already been priced in.” “In fact, we see a downside for the bitcoin price post-halving for several reasons,” the analysts stated.

One examination of open interest in bitcoin futures indicates that one of these reasons is that bitcoin is still in “overbought conditions.” The analysts also emphasized that the price of bitcoin is still significantly higher than JPMorgan’s volatility-adjusted price of $45,000 in relation to gold and beyond its anticipated production cost after halving of $42,000.

The analysts reiterated that despite the recent boom in cryptocurrency, the meager venture capital backing for the industry might potentially depress the price of bitcoin after its halving.

‘Significant decline’ in Bitcoin hash rate is expected after halving.

This week is predicted to bring about the bitcoin halving event, which will lower the issuance incentives for bitcoin miners from the current 6.25 BTC per block to 3.125 BTC. According to the researchers, the decrease is anticipated to have an effect on Bitcoin miners as well as hash rate or compute power.

The analysts reiterated their earlier prediction, saying, “We anticipate a significant drop in the hash rate and consolidation among bitcoin miners with a highest share for publicly-listed bitcoin miners as unprofitable bitcoin miners exit the bitcoin network.”

Analysts predict that some Bitcoin mining companies may shift into lower-energy-cost countries, such as Latin America or Africa, after the halving, with the goal of repurposing their inefficient mining rigs for salvage value.

Although it’s “extremely unlikely,” the analysts noted that since these rigs are specifically intended for mining Bitcoin, they may mine hard fork currency. However, the experts determined that even if they did, they would probably stay unprofitable because these cryptocurrencies have a far smaller market capitalization and liquidity than Bitcoin.

Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Puskar Pande

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