The upcoming halving in April may provoke a sharp decline in the price of the first cryptocurrency, reports The Block with reference to the opinion of JPMorgan experts.
The reduction in the reward from 6.25 BTC to 3.125 BTC, as determined by the algorithm, will reduce the profitability of mining. The financial institution’s report noted that the cost of production affects the price of digital gold. Based on this, a group of analysts led by Nikolaos Panigirtzoglou predicts that after the halving the rate will fall to $42,000.
“The cost of Bitcoin production empirically acted as a lower price limit,” the experts emphasized.
According to their estimates, the cost of “production” of the first cryptocurrency is currently $26,500. After halving, this figure will be $42,000.
“This is also the level to which we believe the price will gravitate once the post-halving euphoria subsides in April,” JPMorgan noted.
Experts also assumed the possibility of a drop in the Bitcoin network hashrate by 20%, primarily due to the massive shutdown of low-efficiency equipment. Accordingly, capacity may be concentrated in large cryptocurrency miners that have taken measures to reduce costs and maintain efficiency.
“There may also be some horizontal integration through mergers and acquisitions between miners in different regions to take advantage of synergies in their businesses,” the experts concluded.
Previously, Matrixport co-founder Daniel Yang predicted a “healthy” market correction of about 15%.
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2024-02-29 17:08:19
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