- JPMorgan predicts Bitcoin prices will fall to $42,000 after upcoming halving event, contradicting industry optimism
- Bank ties forecast to increased production costs and decreased miner rewards post-halving
- Halving expected to eliminate inefficient miners, with only most efficient operations surviving
The price of Bitcoin has been on an upward trajectory in early 2024, coming close to its all-time high. Now the crypto industry awaits how the upcoming halving event will impact Bitcoin’s price.
JPMorgan Predicts Price Drop After Halving
Despite the optimism around the halving reducing supply, JPMorgan released a report predicting Bitcoin will actually fall to $42,000 after the event. Analyst Nikolaos Panigirtzoglou tied the forecast to an increase in production costs and decreased miner rewards post-halving.
Details of JPMorgan’s Analysis
Panigirtzoglou explained the bank’s reasoning, stating Bitcoin’s production cost “has empirically acted as a lower bound for bitcoin prices.” He added, “The central point of our estimated production cost range stands at $26,500 currently, which would mechanically double post-halving event to $53,000.” The analyst believes after the “halving-induced euphoria” ends, prices will drift toward the $42,000 level.
Impact on Miners
According to JPMorgan, the halving will significantly increase production costs, which could eliminate many miners from the market. Only the most efficient operations will survive the post-halving landscape.
Current Market Conditions
Bitcoin is currently trading above $62,000 but has seen a 12% drop over the last 24 hours. The halving is expected to occur on April 19th.
Conclusion
While many anticipate the halving reducing supply will boost Bitcoin’s price, JPMorgan disagrees. The bank sees production cost increases combined with reduced miner rewards pushing the price down to $42,000. It remains to be seen how this key event will truly impact the cryptocurrency’s valuation.
