Rising to falling. Bitcoin just signaled to everyone that it was definitely income in upward trend. A dynamic very clearly supported by the approval of its Spot ETF by the US SEC. And, within a few weeks, the production of new BTC is already no longer able to keep up with the strong demand of these new financial options. Add to this a halving approaching planned for the month of April and the recipe is becoming explosive. However, the always very cautious bank JP Morgan gives a mixed opinion for the rest of the events.
A BTC at $42,000 after the halving
The bank J.P. Morgan became a specialist in the chilly prediction about Bitcoin. In fact, she announced at the beginning of February that institutional traders no longer like cryptocurrencies. This even though miners can no longer provide enough BTC to respond to their request.
But having on your list of analysts to watch a regular cold shower from traditional finance can sometimes help you avoid losing your footing. One wonders, all the same, if JP Morgan’s reports are not written by its CEO, Jamie Dimon. A pathological hater constantly spitting on Bitcoinwhile its wealthy clients always ask for more.
This is the reason why a (too) quick reading of his latest prediction, with $42 as the amount for Bitcoin, will have just triggered a vague doubtful eyebrow. Spoiler alert: it was in fact – quite obviously – about $42,000with the next halving as a deadline.
“This $42,000 estimate is the level we envision BTC prices drifting towards, once the Bitcoin halving-induced euphoria subsides after April. »
J.P. Morgan
BTC production cost vs Bitcoin price
In fact, the JP Morgan bank envisages the next halving of Bitcoin as a major pitfall in the small BTC mining industry. Indeed, the division by 2 of the income of minors 3,125 BTC will, according to its analysts, a negative impact on the profitability of miners.
“The cost of producing Bitcoin has empirically acted as a lower bound for BTC prices. The midpoint of our estimated production cost range currently stands at $26,500, which would mechanically double after a halving to $53,000. »
J.P. Morgan
Producing BTC would therefore amount to $53,000 after the next halving. But then why indicate a price objective at only $42,000 ? The answer is both simple and mathematical: paying 3.125 BTC to complete this task should trigger the disappearance of minors deemed too small to continue this adventure.
A situation which could lead to a significant drop in the computing power (hashrate) of the Bitcoin network following the halving, estimated at 20%. Which would allow, by correlation, to reduce the average cost of production around $42,000.
The JP Morgan bank places this price objective as probable for the price of Bitcoin post-halving. But, historically speaking, this deadline also corresponds to the true starting point of the bull market for BTC. However, the 300,000 BTC already placed under management of spot Bitcoin ETFs allows us to consider a possible change of dynamic in progress. A case to follow…