Bitcoin’s Outperformance Means Some of Expected Post-Halving Rally May Have Come Early: JPMorgan

In a Tuesday research report, JPMorgan suggested that the current downturn in mining stock prices prior to the bitcoin halving presents a profitable buying opportunity for investors.

The combined market value of the 14 US-based bitcoin mining companies monitored by the bank decreased by 28%, or $5.8 billion, from $19.0 billion on March 31 to $13.2 billion on April 15. Each stock failed to keep pace with bitcoin and all experienced losses of at least 20%.

The report pointed out that Bitcoin has increased by 43% so far this year and an impressive 130% over the past six months. It seems that some of the usual price surge following Bitcoin’s halving event occurred earlier than expected.

Every four years, the reward for mining new bitcoins gets cut in half. This event, known as the “halving,” reduces the production rate of new bitcoins and is predicted to take place around mid-April.

The bank expressed strong optimism towards overweight-rated stocks, Riot Platforms (RIOT) and Iris Energy (IREN), due to their appealing price differences compared to other stocks.

As the bitcoin halving approaches, analysts Reginald Smith and Charles Pearce anticipate increased volatility and trading activity in not only bitcoin but also mining company stocks.

JPMorgan explains that the earnings from Bitcoin mining were less in the initial fortnight of April due to “faster increase in the mining network’s computational power than the rise in Bitcoin’s value.”

Read more: Buy Bitcoin Miners Ahead of the Halving, Bernstein Says