- For JPMorgan, Bitcoin is likely to face a drop after the halving
- It is projected that it could reach USD $42,000 per unit
- They indicate that miners will face economic difficulties to cover the operating costs of their work.
- As for the community, commercial pressures will ease once the halving euphoria fades.
- The next halving will take place in April. While Bitcoin is trading above USD $60,300 this February 29
While expectations for the price of Bitcoin are quite bullish at the moment, for JPMorgan this appears to be a transitory period, which could reverse in April once the main digital currency network faces its next halving.
Possible drop in the price of Bitcoin after the halving
This precision was made by JPMorgan analyst Nikolaos Panigirtzoglou, who together with his team presented a report detailing the possible evolution of Bitcoin and the effects that the next halving would entail, cited by The Block, anticipating that the price of the main digital currency could be significantly affected after this event.
In this regard, Panigirtzoglou and his team anticipate that the cut in rewards for network miners will “negatively affect the profitability” of this practice, by entailing higher production costs to mine bitcoins on the network. The latter influences the price of the main digital currency in the markets, which is why JPMorgan analysts project that Bitcoin could drop to $42,000 once the halving becomes effective.
In this regard, The Block presents an excerpt from the report where it reads:
Bitcoin’s production cost has empirically acted as a lower bound for the digital currency’s prices. The center point of our estimated production cost range currently sits at USD $26,500, which would automatically double after the halving event to USD $53,000.
Both Panigirtzoglou and his team agree with other analysts in anticipating that the halving will negatively impact the profitability of mining operations, which is why they project that the network’s HASH (processing power) rate could fall by 20% once the halving is done. cut in rewards. This would occur because the capitalized profits would not offset the operating costs of these practices, forcing miners to disconnect their devices to mitigate losses.
According to JPMorgan analysts, the measure of USD $42,000 for the fall would also be accompanied by the dissolution of the euphoria generated by the halving itself. There is currently a strong campaign in this regard that highlights this event as one of the most significant in the recent history of Bitcoin, which is why we would be seeing a high flow of commercial operations under the premise that the currently available supply will soon be shortened.
Bitcoin aiming to close February above USD $62,000
The reading by JPMorgan analysts occurs amid the euphoria present in the main markets, where each unit of Bitcoin is currently trading at around USD $60,700 per unit, a figure that represents a slight drop of 0.3% in the last 24 hours.
Hand in hand with these prices we have also seen strong volatility these last two days. Yesterday, the digital currency capitalized on the highest prices of the entire year, reaching over USD $63,700 per unit, and then registering a pronounced fall that momentarily placed it below USD $60,000.
On February 29, Bitcoin faced strong volatility, so hours before its current values it approached USD $63,500, this was accompanied by quite high trading volumes in the main exchanges, which together added up to more than USD $73,000 million in trading operations. buy and sell.
Adding to this pressure in the main markets are the volumes seen among the main spot Bitcoin ETFs traded in the US, which yesterday moved more than USD $7.5 billion in commercial transactions.
