JPMorgan analysts predict that the Bitcoin price will drop to $42,000 after the halving event. They cite reduced miner rewards and higher production costs as reasons for this. According to analysts, the Bitcoin mining industry will further consolidate. In this process, larger miners will survive.
JPMorgan: Bitcoin will drop to 42 thousand dollars after halving because…
cryptokoin.comAs you follow from , the halving will take place in April. According to JPMorgan analysts, halving could trigger a sharp decline in Bitcoin price. JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a report published Wednesday that the halving event will reduce BTC miners’ rewards from the current 6.25 BTC to 3,125 BTC per block, and this decrease will negatively affect miners’ profitability. They stated that this would lead to a higher BTC production cost. Bitcoin production cost affects its price. That’s why analysts predict that BTC will be around $42,000 after the halving. Analysts explain their opinions as follows:
The Bitcoin production cost empirically serves as a lower bound for BTC prices. The center point of our estimated production cost range currently sits at $26,500, which will mechanically double the post-halving event to $53,000.
Mining costs will increase with halving
However, analysts say there is a possibility of a 20% drop in the Bitcoin network’s hashrate post-halving, primarily due to less efficient machines leaving mining operations due to reduced profitability. This, they add, would lower the center point of the estimated generation cost range to $42,000, based on an average electricity cost of $0.05/kWh. In this context, analysts make the following statement:
This $42,000 prediction is also the level we predict BTC prices will drift to after April when the Bitcoin-halving-fueled enthusiasm subsides.
There will be consolidation in Bitcoin mining!
According to analysts, after the halving, it is not possible for all miners to survive. Analysts say Bitcoin miners with below-average electricity costs and more efficient equipment will survive. They also note that those with high production costs will struggle.
Therefore, according to analysts, concentration in the Bitcoin mining industry will increase after the halving. Analysts say public BTC miners will reduce overall costs to maintain profitability. That’s why they state that they will have a higher share. “There may also be some horizontal integration through mergers and acquisitions between BTC miners in the regions to leverage synergies in their businesses,” analysts say. Meanwhile, leading crypto BTC was trading at $62,844 at the time of writing. It is traded around .
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