Bitcoin Price After Halving Could Fall Sharply to $42,000

Key Points:

• JPMorgan analysts forecast the Bitcoin price after halving to plummet to $42,000 due to reduced miner rewards and increased production costs.
• JPMorgan analysts anticipate a potential 20% decline in Bitcoin’s hash rate after the halving.

JPMorgan analysts have forecasted a significant dip in the Bitcoin price after halving event, predicting it to plummet to $42,000. This projection stems from the expected reduction in miner rewards and an ensuing rise in production costs, according to The Block report.

Read more: What is Bitcoin Halving? Why is this event of interest?

Bitcoin Price After Halving: Analysts Forecast Dip to $42,000

The impending halving will slash Bitcoin miners’ rewards from 6.25 BTC per block to 3.125 BTC, potentially impacting profitability, according to a report by JPMorgan analysts led by Nikolaos Panigirtzoglou. This reduction in rewards is anticipated to elevate Bitcoin’s production cost, which analysts suggest could settle around $42,000 post-halving.

The halving, occurring every four years, halves the rate at which new Bitcoins are created through mining, shaping Bitcoin’s controlled supply dynamics.

Despite the prospect of decreased profitability, analysts also foresee a possible 20% decline in the Bitcoin network’s hash rate post-halving. This reduction, attributed to less efficient mining rigs exiting operations, could lower the estimated production cost to $42,000, factoring in an average electricity cost of $0.05/kWh.

Miners Brace for Post-Halving Survival Strategies

Analysts predict that the Bitcoin price after halving may gravitate towards the $42,000 mark once the excitement subsides. Furthermore, they anticipate a post-halving scenario where miners with lower electricity costs and superior equipment stand a better chance of survival, potentially leading to industry consolidation through mergers and acquisitions.

This projected price dip contrasts with Bitcoin’s current trading value of approximately $63,000. However, market dynamics post-halving could usher in a new era of concentration in the Bitcoin mining industry, with publicly listed miners likely to gain a larger market share by streamlining costs to safeguard profitability.