Source: Golden Ten Data
Komo and Deutsche Bank do not agree that the price of Bitcoin will rise sharply after being halved.
J.P. Morgan analysts wrote in a report on Thursday that the main impact of the quadrennial halving incident was not the price of Bitcoin, but the mining of Bitcoin. As unprofitable miners exit the Bitcoin network, they expect the industry to consolidate, and publicly traded companies are most likely to gain market share.
J.P. Morgan analysts wrote, “Listed Bitcoin miners are in a good position, mainly because they have easier access to financing, especially equity financing. This helps them scale their business and invest in more efficient equipment.”
Contrary to market consensus, J.P. Morgan's analysis shows that after the halving, the price of Bitcoin is likely to fall as the market is still overbought. The bank also pointed out that the current price of Bitcoin is still higher than its valuation of Bitcoin of 45,000 dollars, which is a comparison price with gold after adjusting for volatility.
J.P. Morgan predicts that the production cost of Bitcoin after being halved will be 42,000 US dollars. It's important to note that Bitcoin's production cost has historically been considered the lower limit of Bitcoin's price. The bank notes that despite the recent recovery in the crypto market, venture capital financing remains sluggish.
Similarly, Deutsche Bank analysts don't think Bitcoin's price will rise significantly after the halving. Analysts said that since the Bitcoin algorithm has anticipated a halving, this event has been digested by the market.
The halving event is about cutting mining rewards in half to control the supply of Bitcoin and provide stability. According to data from the crypto mining analysis website mempool.space, this halving is expected to happen later on Friday.
Deutsche Bank analysts wrote that in the past, after Bitcoin was halved, the hash rate (the main measure of the industry's mining power) usually declined because some miners would be eliminated from the market. “As mining rewards dwindle, this process is becoming increasingly unprofitable.”
Data from Deutsche Bank shows that after Bitcoin's first three halves, the hash rate decreased by 25%, 11%, and 25%, respectively.
Although Bitcoin prices are not expected to fluctuate sharply due to halving, Deutsche Bank still expects Bitcoin prices to remain high in anticipation of spot Ethereum ETF approval, central bank interest rate cuts, and regulatory changes.
“In addition to that, second-tier solutions and the surge in DeFi activity have enhanced the utility of blockchain, and this setup is very beneficial to the Bitcoin ecosystem and the broader crypto sector.”
Currently, the US accounts for 40% of all Bitcoin mining. However, J.P. Morgan Chase and Deutsche Bank both believe that some Bitcoin miners may seek to diversify in “low energy cost regions” (such as Latin America or Africa) and derive recycling value from mining rigs that were otherwise idle.
On Friday, as the worsening situation in the Middle East suppressed risk sentiment, Bitcoin once fell below 60,000 US dollars/coin and fell more than 5% during the day. At one point, Ethereum fell below $2,900 per unit.
editor/tolk