JPMorgan believes that Bitcoin is in the so-called overbought zone, which indicates the risk of an asset price correction. Bank experts note: despite the restoration of the position of the cryptocurrency market, the volume of venture capital inflow to finance cryptocurrency projects remained at a low level. This means that halving will have a significant impact on Bitcoin miners and the industry as a whole:
“Unprofitable Bitcoin miners are already leaving the network, significant drops in hashrate are expected and market consolidation with the largest share among public mining companies is expected.”
According to JPMorgan senior analyst Nikolaos Panigirtzoglou, after the reduction in the reward for the mined block, a number of miners will be forced to look for new locations:
“Bitcoin miners will likely open new data centers in regions with low energy costs. For example, in the countries of Latin America or Africa.”
Bank analysts suggest that the growing costs of miners to purchase more modern equipment and improve infrastructure will have a negative impact on the Bitcoin rate, which could fall to $42,000.
According to JPMorgan, this is the lower limit of the rate, allowing miners to maintain profitability, and halving will hit the infrastructure of companies involved in BTC mining hard.
Earlier, JPMorgan said that the increase in the value of BTC was caused by the actions of retail investors who simultaneously bought futures for Bitcoin and gold.
Source: Bits
I am an experienced journalist, writer, and editor with a passion for finance and business news. I have been working in the journalism field for over 6 years, covering a variety of topics from finance to technology. As an author at World Stock Market, I specialize in finance business-related topics.
