JPMorgan: Bitcoin Expected to Retrace to $42,000 After Halving in April
According to a report by CoinDesk, JPMorgan Chase believes that after Bitcoin’s halving in April, the reduction in rewards and the increase in production costs will have a negative impact on miners’ profits, with an estimated price drop to $42,000.
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Bitcoin price to face correction after April
High costs to affect miners
JPMorgan Chase points out that the production cost of Bitcoin has always been the lower limit of its price. Currently, the bank estimates that the center point of the Bitcoin production cost range is around $26,500, which will double to $53,000 after the halving. The report suggests that the network’s hash rate may also decrease by 20% after the halving, which will lower the estimated production cost and price of BTC to $42,000.
Analyst Nikolaos Panigirtzoglou stated in the report:
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Once the optimism triggered by Bitcoin’s halving in April fades, the price of Bitcoin will tend towards this level, and $42,000 is our estimated price.
JPMorgan Chase also pointed out that the halving will also affect miners with higher costs. Bitcoin miners with lower electricity costs and higher machine efficiency may survive, while miners with higher production costs may struggle.
Larger publicly-listed Bitcoin miners have a better chance of winning in this “survival battle”, and their market share will increase after the halving.
Asset management company CoinShares previously published a mining report, stating that the average cost for miners after the halving will be $37,856. If the long-term Bitcoin price remains below $40,000, only five mining companies, Bitfarms, Iris, CleanSpark, TeraWulf, and Cormint, will be able to successfully profit and operate.
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CoinShares report: Bitcoin miners’ cost after halving is $37,800, only five mining companies can profit
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JPMorgan Chase
Bitcoin
Bitcoin miners
Further reading:
BlackRock hosts private lecture for high-net-worth clients, suggests 28% Bitcoin investment allocation
Bitcoin achieves best monthly gain in history, continues to fluctuate at $61,000 high.
