According to a report by CoinDesk, JPMorgan stated in a research report on Tuesday (16th) that the recent weakness of cryptocurrency mining-related stocks before Bitcoin’s halving has provided an attractive entry point for investors.
From March 31st to April 15th, the total market value of 14 Bitcoin mining companies tracked by JPMorgan in the United States dropped to $14.2 billion, a decrease of about 28% ($5.8 billion). The performance of these stocks has been weaker than Bitcoin, with all of them falling by at least 20%.
The report pointed out that Bitcoin has risen by 43% so far this year and 130% in the past six months, as the “typical post-halving rebound seems to have happened partially in advance”.
The Bitcoin halving mechanism, which occurs once every four years, will reduce the block rewards earned by miners and slow down the growth rate of Bitcoin supply. According to data from CoinMarketCap, the upcoming halving event is expected to occur this Saturday (April 20th) Taiwan time, when the block reward will decrease from the current 6.25 BTC to 3.125 BTC.
JPMorgan stated that it particularly favors Riot Platforms (RIOT) and Iris Energy (IREN), which have attractive relative valuations. Analysts Reginald Smith and Charles Pearce wrote:
JPMorgan also pointed out that the mining profitability in the first two weeks of April has declined due to the “growth rate of network hashrate exceeding the rate of Bitcoin price increase”.
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