Bitcoin (BTC) Half happenedThis April decision will have a negative impact on miners' profitability due to lower rewards and higher production costs and could ultimately mean lower cryptocurrency prices, JPMorgan (JPM) said in a research report released on February 28.
The bank notes that the cost of producing Bitcoin has historically served as a floor for Bitcoin prices, and says this could fall to $42,000 after the halving.
The center point of the bank's estimated production cost range is currently about $26,500, which will mechanically double to $53,000 after the halving. The Bitcoin network could also see a 20% drop in its value Hash rate After the halving, which will bring BTC's estimated production cost and price down to $42,000, the report said.
“This $42,000 estimate is also the level we envision Bitcoin prices drifting toward once the euphoria from the post-April Bitcoin halving subsides,” analysts led by Nikolaos Panigirzoglou wrote.
This has implications for high-cost miners, the bank said. “Bitcoin miners with below-average electricity costs and more efficient rigs will likely be able to survive while those with high production costs will suffer.”
Larger, publicly listed bitcoin miners are better placed to endure the “fight for survival,” the authors wrote, adding that “in a similar manner to 2022” their market share is expected to increase after the halving.
