JP Morgan has poured cold water on hopes for a strong cryptocurrency next year, with bank analysts taking a “cautious” stance on the cryptocurrency outlook for 2024.
Bitcoin halving is “largely reflected in prices,” analysts led by Nikolaos Panigirtzoglou said in a newly released report. That’s because the halving event and its impact on Bitcoin supply is “predictable and, in our opinion, well reflected in the current Bitcoin price.”
Based on the current situation, the team argued as follows: Bitcoin Depending on hash rate and mining difficulty, miners’ production costs are expected to increase from about $22,000 currently to about $44,000 after the halving.
Bitcoin’s current price of around $42,000 is consistent with a 5% drop in hash rate after the halving, which “seems too low.” The team expects hashrate to drop by 20% and miners with higher overhead to exit the market.
After the halving in 2020 price of bitcoin Calculating it at a 1:1 ratio to miners’ production costs, the report suggests that the fact that Bitcoin’s current price is roughly twice its production costs means the 2024 halving is largely factored into its price.
The report also expressed skepticism about the approval of the long-awaited position. Bitcoin ETF It will bring new capital into the market. JP Morgan analysts say there is a lack of investor interest in spot ETFs already approved in Canada and Europe and a shift away from existing bitcoin products, such as the Grayscale Bitcoin Trust, to spot bitcoin ETFs. I’ve mentioned all the possibilities for this move.GBTC), a Bitcoin futures ETF and a Bitcoin mining company.
The report claimed that up to $2.7 billion could be pulled out of GBTC after investors switch to spot Bitcoin ETFs at a profit. Analysts said that if those funds leave the market rather than move into other Bitcoin products, it would put “severe downward pressure” on the Bitcoin price.
Ethereum Capable of “outstanding performance” Bitcoin The report said it raised concerns about staking centralization on the Ethereum network, pointing to the 2024 EIP-4844 “Protodanksharding” upgrade as a potential catalyst.
The report also warned that it was “too early to get excited” about the resurgence. DeFi and NFT The activity points to an “encouraging” rise in new DeFi chains, including Aptos, SUI, and Pulsechain, and a “renewed interest” in NFTs sparked by the emergence of Bitcoin Ordinals.
JP Morgan and cryptocurrency
The JP Morgan report comes just a week after the company’s CEO, Jamie Dimon, took aim at cryptocurrencies, saying during a Senate Banking Committee hearing that he would “shut down” if he were the U.S. government.
“The real use cases for cryptocurrencies are criminals, drug traffickers, money laundering, tax evasion,” Dimon claimed, adding, “I have always been opposed to cryptocurrencies, Bitcoin, etc.”
