JPMorgan Analysts Predict Bitcoin Crash To $42,000 Post-Halving – What You Need To Know

Samuel Edyme

1 year ago

3 mins read

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Bitcoin, the world’s largest cryptocurrency, faces a potential downturn in its price following the anticipated halving event scheduled for April, according to analysts at JPMorgan led by Nikolaos Panigirtzoglou.

This event occurs approximately every four years and is expected to slash miner rewards from 6.25 BTC per block to 3.125 BTC. As a result, JPMorgan analysts have warned that the Bitcoin price could drop toward $42,000 post-halving.

Reason Behind The Potential Crash To $42,000

The analysts attribute this potential decline to the reduced profitability for miners and the subsequent increase in BTC production costs. The analysts disclosed that the Bitcoin production cost has historically served as a “lower bound” for its prices, with the estimated range doubling post-halving to around $53,000.

Nonetheless, a potential 20% reduction in the BTC network’s hashrate looms is primarily attributed to the departure of less efficient mining rigs from the operational landscape.

Consequently, this scenario may drive the estimated production cost range to $42,000, calculated under an average electricity cost of $0.05 per kilowatt-hour (kWh).

According to the analyst, Bitcoin miners with “below-average electricity costs” and “more efficient equipment” are expected to fare better following the halving event. In contrast, those with “higher production costs” may struggle to remain profitable.

Consequently, analysts anticipate an increased concentration within the Bitcoin mining industry, with publicly listed miners likely to hold a higher share.

Moreover, there is the prospect of “horizontal integration” via “mergers and acquisitions” among miners spanning different regions, aiming to leverage “synergies and minimize” collective operational expenses.

Bitcoin Market Sentiments And Potential Surge

Meanwhile, as JPMorgan analysts suggest a potential drop in Bitcoin’s price post-halving, Hunter Horsley, CEO of Bitwise, remains optimistic about Bitcoin’s long-term outlook. Horsley predicts that the cryptocurrency will surge to $250,000 sooner than anticipated.

Bitcoin is going to eat into gold’s TAM faster than people expect.

$250k Bitcoin could happen much sooner than most who’ve followed the space for years would imagine.

Why? For 15 years, Bitcoin proved it’s merits but was only accessible to some.

Bitcoin ETFs were Bitcoin’s…

— Hunter Horsley (@HHorsley) February 28, 2024

Meanwhile, many metrics within the BTC market signal a potential surge for Bitcoin. On-chain data reveals that the Bitcoin MVRV ratio has reached levels reminiscent of the parabolic bull run experienced in 2020, suggesting a forthcoming surge may be imminent.

MVRV hit 2.5, indicating a +150% average profit for all #Bitcoin wallets.

In Nov 2020, MVRV was 2.5 at $18K, preceding the all-time high and parabolic bull run.https://t.co/cx8nYhNeeI pic.twitter.com/PgRLietkkz

— Ki Young Ju (@ki_young_ju) 2

Amid these varying forecasts and market sentiments, BTC trades at $63,391, marking a slight retracement from its recent peak above $64,000 – the highest level traded in the past two years.

Featured image from Unsplash, Chart from TradingView

Samuel Edyme

Meet Samuel Edyme, Nickname - HIM-buktu. A web3 content writer, journalist, and aspiring trader, Edyme is as versatile as they come. With a knack for words and a nose for trends, he has penned pieces for numerous industry player, including AMBCrypto, Blockchain.News, and Blockchain Reporter, among others.

Edyme’s foray into the crypto universe is nothing short of cinematic. His journey began not with a triumphant investment, but with a scam. Yes, a Ponzi scheme that used crypto as payment roped him in. Rather than retreating, he emerged wiser and more determined, channeling his experience into over three years of insightful market analysis.

Before becoming the voice of reason in the crypto space, Edyme was the quintessential crypto degen. He aped into anything that promised a quick buck, anything ape-able, learning the ropes the hard way. These hands-on experience through major market events—like the Terra Luna crash, the wave of bankruptcies in crypto firms, the notorious FTX collapse, and even CZ’s arrest—has honed his keen sense of market dynamics.

When he isn’t crafting engaging crypto content, you’ll find Edyme backtesting charts, studying both forex and synthetic indices. His dedication to mastering the art of trading is as relentless as his pursuit of the next big story. Away from his screens, he can be found in the gym, airpods in, working out and listening to his favorite artist, NF. Or maybe he’s catching some Z’s or scrolling through Elon Musk’s very own X platform—(oops, another screen activity, my bad…)

Well, being an introvert, Edyme thrives in the digital realm, preferring online interaction over offline encounters—(don’t judge, that’s just how he is built). His determination is quite unwavering to be honest, and he embodies the philosophy of continuous improvement, or “kaizen,” striving to be 1% better every day. His mantras, “God knows best” and “Everything is still on track,” reflect his resilient outlook and how he lives his life.

In a nutshell, Samuel Edyme was born efficient, driven by ambition, and perhaps a touch fierce. He’s neither artistic nor unrealistic, and certainly not chauvinistic. Think of him as Bruce Willis in a train wreck—unflappable. Edyme is like trading in your car for a jet—bold. He’s the guy who’d ask his boss for a pay cut just to prove a point—(uhhh…). He is like watching your kid take his first steps. Imagine Bill Gates struggling with rent—okay, maybe that’s a stretch, but you get the idea, yeah. Unbelievable? Yes. Inconceivable? Perhaps.

Edyme sees himself as a fairly reasonable guy, albeit a bit stubborn. Normal to you is not to him. He is not the one to take the easy road, and why would he? That’s just not the way he roll. He has these favorite lyrics from NF’s “Clouds” that resonate deeply with him: “What you think's probably unfeasible, I've done already a hundredfold.”

PS—Edyme is HIM. HIM-buktu. Him-mulation. Him-Kardashian. Himon and Pumba. He even had his DNA tested, and guess what? He’s 100% Him-alayan. Screw it, he ate the opp.

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