JPMorgan, Deutsche Bank Analysts Do Not Expect BTC Price to Surge Post Halving: Report

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Sujha Sundararajan

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April 19, 2024

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Analysts at the biggest bank in the US – JP Morgan, says Bitcoin halving is already priced in. This time, the implication would be mainly on Bitcoin mining rather than BTC price, they wrote in a research report.

Bitcoin mining – a four-year event that slashes Bitcoin mining rewards in half – is set to occur around April 19-20.

JP Morgan authors noted that they do not expect to see post-halving price rise as the event “has already been already priced in.” The experts stressed caution, noting to the possibility the gains have already been realized.

Cited by Bloomberg, the analysts wrote that the market is still in overbought conditions. Further, the report stressed that Bitcoin miners will be most affected by the event.

Miners who are pre-prepared for the halving have likely laid the groundwork ahead of time by perhaps raising new capital.

However, “as unprofitable Bitcoin miners exit the Bitcoin network, we anticipate a significant drop in the hashrate and consolidation among Bitcoin miners with a highest share for publicly-listed Bitcoin miners,” the report read.

That said, per a recent report by Bitwise, total miner revenue slumped one month after each Bitcoin halvings held previously. Although, the revenue rebounded significantly later, thanks to BTC price increase and miners expanding their operations.

JP Morgan analysts led by Nikolaos Panigirtzoglou wrote that post the upcoming having, some Bitcoin mining firms might look to diversify their operations to low-energy cost regions such as Latin America. This is “to locate their inefficient mining supply and gain salvage values from those rigs which would otherwise sit idle.”

Bitcoin Halving Has Already Been Factored in the Market: Deutsche Bank

On a similar note, analysts from Deutsche Bank have also stressed that there would be no significant rally expected post-event. They wrote that Bitcoin halving already factored into prices.

Deutsche Bank analysts Marion Laboure and Cassidy Ainsworth-Grace suggest that the market has already partially priced in the halving.

Per the analysts, the hashrate after three Bitcoin halvings in the past have plummeted by 25%, 11%, and 25%. This is because some miners are priced out of the market, they wrote. Hasrate is the measure of total mining capacity of the crypto industry.

“Participating in the process of guessing the hash and adding a block to the blockchain becomes less profitable as the reward to mining decreases.”

Despite price fluctuations, analysts are optimistic that BTC price would remain high, given the spot Ethereum ETF approval anticipation.

“Adding to that, a surge in layer-2 solutions and DeFi activity, which augment the network’s practical utility, and the setup begins to look remarkably favorable for the Bitcoin ecosystem and the wider crypto space,” the authors wrote.