JPMorgan explains why bitcoin could plummet 33% following its April halving.

After its long-awaited halving in April, JPMorgan predicts a 33% drop in bitcoin. The business says this halving might set off a cascade of events that would drop pricing down to $42,000 after enthusiasm subsides.

The "will have a negative impact on miners' profitability given reduced rewards and a higher bitcoin production cost," experts said. Bitcoin bulls are thrilled about a "halving" event that will limit supply and theoretically enhance the token's price, beyond new ETFs. Expect another in April.

However, the event will cut daily token issuance by half, reducing miners' issuance awards and lowering earnings due to rising production costs.

This might hurt bitcoin, which rose above $60,000 for the first time in two years, according to JPMorgan. The business says that production costs have previously set a floor under bitcoin prices, but the halving might lower it.

After the halving, JPMorgan estimates bitcoin might go as low as $42,000, or 33% from Friday's $62,608 level. Bitcoin hashrate is the focus of this projection. JPMorgan predicts a 20% drop after the halving "mainly due to less efficient rigs exiting mining as they become unprofitable."

This 20% drop would bring the hashrate closer to its historical trend," JPMorgan analysts stated Feb. 28. "This would effectively cut the central point of our estimated production cost range to $42k." Added: "This $42k estimate is also the level we envisage bitcoin prices drifting towards once bitcoin-halving-induced euphoria subsides after April."

After a number of ETFs were approved to make bitcoin more accessible, bitcoin demand is still rising. BlackRock's bitcoin ETF saw $520 million in a single day this week, the second-biggest in US fund history, as investors chased bitcoin's gains above $60,000.

Merrill and Wells Fargo began offering bitcoin ETFs to clients this week as usage and credibility increased, suggesting the craze may continue.

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