Is The Bitcoin Halving Already Priced In? JPMorgan Expects Bitcoin To Tank After The Upcoming Event

On April 20, or when a Bitcoin miner mines block number 840,000, the amount of Bitcoin (BTC) entering into circulation will be reduced by half from about 900 a day to a mere 450.

Institutional investors’ strong demand for purchasing the new spot Bitcoin exchange-traded funds (ETFs) and BTC’s history of displaying a parabolic uptrend after supply-halving events are the reasons why investors highly anticipate this week’s event.

However, analysts from JPMorgan have suggested that the quadrennial halving is already priced in. As such, they expect the Bitcoin price to see a massive dump after the event instead of pumping.

Bitcoin Halving Rally Priced In

JPMorgan sees a Bitcoin downturn after the incoming halving as the event is likely priced in.

“We do not expect Bitcoin price increases post-halving as it has already been priced in. In fact, we see a downside for the Bitcoin price post-halving for several reasons,” JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in an April 17 report.

Firstly, the bank’s analysis of open interest in Bitcoin futures indicates that the market is currently in overbought conditions. Moreover, Bitcoin’s current price of around $63,790 is still above JPMorgan’s volatility-adjusted price of $45,000 compared to gold and its projected production cost of $42,000 after the halving.

The analysts further noted that venture capital funding year-to-date, which remains muted despite the crypto market comeback, could also pull the BTC price down post-halving.

JPMorgan also expects the halving to impact Bitcoin miners as well as the Bitcoin mining hash rate:

“As unprofitable bitcoin miners exit the bitcoin network, we anticipate a significant drop in the hash rate and consolidation among bitcoin miners with a highest share for publicly-listed bitcoin miners.”

Some Bitcoin mining companies could consider diversifying into regions with lower energy costs, such as Latin America and Africa, after the halving.

Bitcoin Halving One Day Away 

The much-awaited BTC halving is almost here, and the crypto community is looking forward to the Bitcoin price reaction to it. After the looming fourth halving, miners will earn 3.125 BTC instead of the current 6.25 BTC for validating transactions and creating new blocks on the blockchain.

Halving events aim to maintain the scarcity of the premier cryptocurrency by gradually decreasing the rate at which new Bitcoins are injected into circulation. Ultimately, this process will result in a total of 21 million Bitcoins being mined, with no more coins being minted after the last halving event.

This halving is especially distinct from previous ones because of the substantial increase in capital coming into the market following the January spot ETF approvals. With the reduction of supply due to the halving itself and skyrocketing demand from the ETFs, basic economic principles suggest this should result in Bitcoin growing exponentially.

Whether Bitcoin sets a new all-time high after the halving or recoils lower remains to be seen.