JPMorgan, $JPM, says Bitcoin’s price may drift back toward $42,000 after April, per Bloomberg.
The bank points out that historically, the production cost of bitcoin has served as a floor for BTC prices, and it suggests this could drop to $42,000 after the halving. The bank's estimated central production cost is currently around $26,500, which would mechanically double to $53,000 post-halving. However, the bitcoin network might also experience a 20% decrease in its hashrate after the halving, leading to a reduction in the estimated production cost and the price to $42,000, according to the report.
"This $42,000 estimate is also the level we expect bitcoin prices to move towards once the euphoria from the bitcoin halving fades after April," analysts led by Nikolaos Panigirtzoglou wrote.
This development has implications for miners with higher costs, the bank noted. "Bitcoin miners with below-average electricity costs and more efficient rigs are likely to survive, while those with high production costs would struggle."
The bank added that larger publicly listed bitcoin miners are in a better position to survive in this "survival battle," with their market share expected to increase post-halving, similar to what happened in 2022.
