Bitcoin Likely to Drop After the Halving, JPMorgan Says

Based on their assessment of bitcoin futures open interest, the bank believes that the world’s largest cryptocurrency may experience a downturn following the halving due to current market conditions being considered overbought.

The price of cryptocurrency is currently around $61,200, which is higher than the bank’s gold comparison adjusted for volatility, valued at $45,000, and its projected production cost post-halving of $42,000. Historically, the bitcoin production cost has functioned as a minimum price benchmark for Bitcoin.

JPMorgan points out that the revival of the cryptocurrency market has not significantly increased venture capital investment, as of now.

Mining companies will experience the most significant consequences of the bitcoin halving, according to analysts. As less profitable Bitcoin miners withdraw from the network, there is expected to be a substantial decrease in hashrate and a concentration of mining power among larger, publicly-listed mining operations.

After the Bitcoin halving, mining companies might consider expanding to areas with lower energy costs, like Latin America or Africa, to operate their less efficient mining equipment. By doing so, they can extract some value from these rigs instead of leaving them unused.

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