According to a report by The Block, JPMorgan analysts predict that the price of Bitcoin will decline after the halving event, as this event has already been reflected in the current price.
Based on an analysis of Bitcoin futures open interest (OI), these reasons include Bitcoin still being in an “overbought state”. Additionally, analysts reiterate that compared to gold, the price of Bitcoin is still significantly higher than JPMorgan’s volatility-adjusted price of $45,000, and it remains higher than the expected production cost of $42,000 after the halving.
Analysts also reiterate that despite the recovery of cryptocurrencies, the lukewarm cryptocurrency venture capital investment this year may also weigh down the price of Bitcoin after the halving.
After the halving, the Bitcoin hash rate may experience a significant drop.
According to data from CoinMarketCap, the upcoming halving event is expected to occur this Saturday (April 20) Taiwan time, when the block reward will decrease from the current 6.25 BTC to 3.125 BTC. JPMorgan analysts state that this reduction is expected to impact Bitcoin miners and the Bitcoin mining hash rate.
Analysts state:
According to analysts, after the halving, some Bitcoin mining companies may consider diversifying into regions with lower energy costs, such as Latin America or Africa, in order to repurpose their inefficient mining machines to extract residual value.
Analysts also state that they may mine Bitcoin hard fork cryptocurrencies, but the “likelihood is small” because these machines are specifically designed for mining Bitcoin. Analysts conclude that even if miners were to do so, they are likely to remain unprofitable due to the significantly lower market capitalization and liquidity of these cryptocurrencies compared to Bitcoin.
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