JPM in a crypto note, looking for a lower BTC price once bitcoin-halving-induced euphoria subsides after April. In brief:
- the halving event will reduce Bitcoin miners' rewards from currently 6.25 BTC per block to 3.125 BTC
- this will negatively impact miners' profitability
- will lead to a higher bitcoin production cost, and the bitcoin production cost influences its price
- "The bitcoin production cost has empirically acted as a lower bound for bitcoin prices. The central point of our estimated production cost range stands at $26,500 currently, which would mechanically double post halving event to $53,000."
- is a possibility of a 20% decline in the Bitcoin network's hashrate post halving,
- mainly because of less efficient rigs exiting mining operations due to reduced profitability
- which would lower the central point of the estimated production cost range to $42,000, based on an electricity cost
