• JPMorgan anticipates a decline in bitcoin following the upcoming reward halving event, citing the cryptocurrency’s current overbought status based on the bank’s analysis.
• The bank’s assessment indicates that miners will bear the brunt of the halving’s impact, as outlined in their report.

JPMorgan, a prominent Wall Street institution, released a research report on Wednesday forecasting a potential weakening in the price of bitcoin (BTC) post the reward halving event, scheduled for around April 19-20. This quadrennial occurrence serves to curb the growth rate of bitcoin supply.

The bank’s analysis points towards a bearish outlook for the leading cryptocurrency after the halving due to prevailing overbought market conditions, particularly evident in the open interest of bitcoin futures.

Moreover, despite bitcoin’s price hovering around \(61,200, JPMorgan highlights that it exceeds the bank’s volatility-adjusted comparison with gold, pegged at \)45,000, and the projected production cost of $42,000 post-halving. Historically, the bitcoin production cost has acted as a crucial support level for BTC prices.

JPMorgan also underscores the subdued nature of venture-capital funding amidst the recent resurgence in the crypto market.

The impending halving is expected to have a substantial impact on mining entities, with the exit of unprofitable miners likely leading to a significant decrease in hashrate. This scenario could prompt consolidation among bitcoin miners, with a notable market share shift towards publicly-listed mining companies, as described by analysts led by Nikolaos Panigirtzoglou.

Following the halving, some bitcoin mining firms may explore diversification into regions with lower energy costs such as Latin America or Africa. This strategic move aims to repurpose inefficient mining rigs for salvage value, preventing them from becoming idle assets.

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

Edited by Sheldon Reback.