JPMorgan holds the belief that Bitcoin is currently in an overbought state, indicating a risk of a correction in its price. The bank’s experts highlight that despite the cryptocurrency market showing signs of recovery, venture capital inflows into cryptocurrency projects remain relatively low. This suggests that the halving event will have a significant impact on Bitcoin miners and the industry as a whole:
“Unprofitable Bitcoin miners are already leaving the network, and we anticipate significant drops in hashrate, along with market consolidation among public mining companies.”
According to JPMorgan’s senior analyst, Nikolaos Panigirtzoglou, the reduction in the block reward will compel several miners to search for new locations:
“Bitcoin miners will likely establish new data centers in regions with low energy costs, such as certain countries in Latin America or Africa.”
Bank analysts predict that the rising costs for miners to procure more advanced equipment and enhance their infrastructure will negatively impact the Bitcoin price, possibly causing a fall to $42,000.
According to JPMorgan, this marks the lower threshold for the price, ensuring miners can sustain profitability. Furthermore, the halving event will present significant challenges for the mining infrastructure of companies involved in Bitcoin mining.
Earlier, JPMorgan attributed the surge in BTC value to the actions of retail investors who simultaneously purchased futures for Bitcoin and gold.