Bitcoin May Slump To $42K After The BTC Halving, JPMorgan Says

Updated: 01 March 2024

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The Bitcoin price might slump to $42,000 in the aftermath of the upcoming BTC halving event in April, JPMorgan said.

JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a Feb. 28 note that the BTC production cost “has empirically acted as a lower bound” for BTC’s price.

The central point of its estimate for that production cost range now stands at $26,500, which would mechanically double post the Bitcoin halving to $53,000, they say.

But there may be a 20% fall in the Bitcoin network’s hashrate after the BTC halving, which would lower the central point of its estimated production cost range to $42,000, it said.

“This $42,000 estimate is also the level we envisage bitcoin prices drifting towards once bitcoin-halving-induced euphoria subsides after April,” said the analysts

Less Efficient Bitcoin Mining Operations Will Likely Close Down

The analysts went on to speculate that miners with below-average electricity costs and more optimized mining setups are likely to survive after the halving event, while those with higher production costs would struggle.

The potential exit of smaller and less-efficient minings operations will make the BTCn mining industry more concentrated as well, they added. This may subsequently boost the market share of publicly listed BTC miners.

According to The Block, JP Morgan predicted in a report on the 28th (local time) that "Bitcoin could fall to $42,000 after the halving in April." Analyst Nikolaos Panigirtzoglou stated that the halving would reduce miner rewards from 6.25 BTC to 3.125 BTC per block, impacting…

— BitcoinWorld Media (@ItsBitcoinWorld) February 29, 2024

The historic halving event will come hard on the heels of the approval of spot Bitcoin ETFs (exchange-traded funds) in the US at the start of the year.

The launch of these investment products unlocked a wave of institutional investment for BTC that caused the crypto to surge.

Over the past 30 days, Bitcoin has skyrocketed over 47% to trade at $62,193.06 as of 5:25 a.m. EST.