Leading global financial institution that offers solutions in investment and commercial banking, JP Morgan, has predicted that the price of Bitcoin will drop after the halving event.
The bank analysis of open interest in Bitcoin futures shows that the cryptocurrency is still considered overbought.
JP Morgan wrote via a research report,
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“The price of Bitcoin is likely to weaken after the reward halving, a quadrennial event that slows the rate of growth in Bitcoin supply and looks set to occur around April 19-20”.
Furthermore, the price of Bitcoin is about $64,000, which is still above the bank’s volatility-adjusted comparison with gold, which sets it at $45,000, and its projected production cost of $42,000 after the halving. The bitcoin production cost has historically acted as a lower boundary for BTC prices.
JP Morgan also notes that venture capital funding remains subdued despite the recent crypto market resurgence. In line with JP Morgan’s prediction, investment banking company Goldman Sachs has also cautioned its clients from reading too much into the past halving cycles.
According to Goldman, BTC’s halving is a “psychological reminder to investors of BTC’s capped supply,” and the medium-term outlook depends on the uptake of the ETFs.
The bank said,
“Historically, the previous three halvings have been accompanied by BTC price appreciation after the halving, although the time it took to reach all-time highs differs significantly. Caution should be taken against extrapolating the past cycles and the impact of halving, given the respective prevailing macro conditions,”
In contrast to JP Morgan and Goldman Sachs Bitcoin prediction, BitMEX Co-founder Arthur Hayes predicts that the price of Bitcoin will go above the $100k Mark and even grow to the $750,000 value by 2026. Hayes had predicted in 2023 that the price of Bitcoin would trade around $25 – 30k, and in 2024 would surge to a new all-time high.
With the Bitcoin Halving event around the corner, the rewards for miners will be cut to create a new Bitcoin in half, from 6.25 Bitcoin to 3.125 Bitcoin. Halving is an integral part of the Bitcoin blockchain system, which creates a monetary system that controls inflation. Halving happens every four years.
Currently, the price of Bitcoin has started to retrace upward, moving towards the $70k price. With the price of Bitcoin trading at $63,893 as of the time of writing the report, the price of the crypto asset has continued to gain momentum.
According to CoinMarketCap the positive sentiment spread across the crypto sphere, lifting the global crypto market cap to $2.35 trillion, 4% higher than the previous day. The crypto community is currently watching closely as the halving event is only a few hours away.