JPMorgan predicts a 20% drop in Bitcoin’s hash rate after the 2024 halving, impacting the mining industry. CleanSpark is JPMorgan’s top pick among mining firms.
Key Takeaways
- A 20% decline in Bitcoin Network Hash Rate is anticipated by JPMorgan following the 2024 halving.
- The Bitcoin mining industry faces a crucial juncture due to the reward-cutting halving event.
- CleanSpark earns JPMorgan’s top pick among Bitcoin mining firms, despite not being the largest operator.
- Some Bitcoin enthusiasts challenge the conventional belief linking Bitcoin’s four-year cycles to halvenings.
In a recent revelation, financial titan JPMorgan has speculated a notable 20% fall in the Bitcoin Network Hash Rate, coming in the aftermath of the anticipated Bitcoin halving event in April 2024.
“Not all miners created equal. Miners vary by scale, operating efficiency, access to capital and growth prospects. We believe CLSK, our top pick, offers the best balance of scale, growth potential, power costs, and relative value. MARA is the largest operator but has the highest… pic.twitter.com/Jj3CseRI6M
— S Matthew Schultz (@smatthewschultz) October 11, 2023
“A whopping 80 EH/s (or 20% of the network hashrate) might be phased out at the next halving as obsolete hardware is sidelined,” divulges the report.
The upcoming halving, a preset, algorithmic event that curtails Bitcoin miners’ rewards by 50%, symbolizes a pivotal moment for the Bitcoin mining industry, landing it in what’s been dubbed a “crucible moment”
JP Morgan Predictions
JPMorgan propounds that the upcoming four-year block reward could amass around $20 billion, presupposing the currency’s price remains stable.
However, this signifies a marked plunge of approximately 72% from just over two years prior, elucidating, “To place in context, this estimation soared to roughly $73 billion in April ‘21 and oscillated between $14 billion and $25 billion within the past year.”
Even amidst these foreboding predictions, JPMorgan extols CleanSpark as its “top pick” among Bitcoin mining companies, notwithstanding the fact that Marathon Digital retains the title of the largest operator.
The investment conglomerate calls attention to Marathon Digital’s heightened energy costs and minimized margins, whereas it views Riot Platforms as maintaining relatively low power costs and liquidity.
Contrastingly, a recent report by BeInCrypto proposes an alternative perspective, suggesting that Bitcoin’s four-year cycles might not be inherently tied to halvening events as widely presumed.
Citing a Bitcoin enthusiast known as ‘Pledditor,’ the report brings into question prevalent assumptions, stating, “Bitcoin’s four-year cycles are merely coincidental and bear minimal connection with the halvenings.”
Concluding Thoughts
While JPMorgan’s projection presents a meticulous outlook founded upon the historically observed impacts of Bitcoin halving on network metrics, the nascent and inherently disruptive nature of the crypto space continuously defies anticipations.
As critics, like Pledditor, rightly highlight, the cryptocurrency domain remains far too youthful and erratic to form dependable long-term predictions with assuredness.
The entwining of technological advances, regulatory frameworks, and macroeconomic factors could potentially contravene the expected outcomes of Bitcoin’s 2024 halving, illustrating that the future of the Bitcoin network – and by extension, its hash rate – may not be as set in stone as traditional financial forecasting models might imply.
This conundrum emphasizes the critical necessity for adaptive, agile strategies within the ever-evolving world of cryptocurrency investments and operations.
