The halving event expected to occur in April will reduce Bitcoin miner rewards to 3.125 BTC per block from the current 6.25 BTC, and JPMorgan analysts led by Nikolaos Panigirtzoglou said in a report on Wednesday that this output The halving event will have a negative impact on the profitability of miners, leading to an increase in the cost of Bitcoin production, which will in turn have an impact on the market price of Bitcoin. Analysts predict that the price of Bitcoin will fall to $42,000 after the halving.
The analysts wrote in the report:
"Bitcoin's production cost has proven to be the bottom of Bitcoin's price in practice. Our current median estimate of production cost is US$26,500, which is expected to automatically increase to US$53,000 after the halving event."
Additionally, analysts added that the Bitcoin network’s hash rate could fall by 20% after the halving as lower profitability causes less efficient miners to exit the mining business, which would push the estimated production cost range down. The center point is further reduced from 53,000 to $42,000 (based on an average cost of electricity of $0.05/kWh). Analysts said:
“This $42,000 estimate is also the level we foresee Bitcoin prices trending towards after the frenzy caused by the Bitcoin halving subsides after April.”
On the other hand, analysts have also expressed concerns about the risk of miner concentration on the Bitcoin network after the halving. Analysts said that after the halving, the share of publicly listed Bitcoin miners will be higher as they will reduce overall costs to protect profitability. In addition, there may also be mergers and acquisitions between Bitcoin miners in different regions. Achieve horizontal integration to exploit synergies in their businesses.
