According to a research report by Wall Street behemoth JPMorgan (JPM), the bitcoin (BTC) price is expected to drop following the halving event on April 20.
Historically, bitcoin production costs have served as a lower constraint for BTC pricing. Despite the current comeback in the cryptocurrencycurrency business, JPMorgan emphasizes that venture capital funding remains low.
He forecasts a dip in Bitcoin’s price following the halving, citing heavy demand in futures markets as an indicator of overbuying. The current bitcoin price of approximately $61,200 is higher than JPMorgan’s volatility-adjusted comparison with gold, which is $45,000, as well as the expected manufacturing cost of $42,000 following the halving.
The halving will have the greatest impact on mining operations, with the bank expecting a “significant drop in hashrate and consolidation among bitcoin miners.” According to the paper, mining companies may employ aging rigs in low-cost energy areas such as Latin America or Africa to extract any remaining value.
JPMorgan earlier warned investors that the bitcoin price might fall to $42,000 following the April halving event, stating that $42,000 is the figure they “envisage bitcoin prices drifting towards once bitcoin-halving-induced euphoria subsides after April.” The bank has also claimed that the bitcoin halving and the next big Ethereum update are “largely priced in.”
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