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Bitcoin Halving 2024: JPMorgan Predicts a Much More Challenging Situation for BTC Miners

Thu 12 Oct 2023 ▪ 4 min of reading ▪ by Mikaia A.
Getting informed Mining

About 6 months from now, the Bitcoin halving, which is the ‘halving’ of rewards given to miners working with the Bitcoin protocol, is set to take place. The Bitcoin halving has been the subject of various speculations and analyses, with discussions ranging from the potential price increase of BTC to the challenges miners might face, as well as systemic effects. JP Morgan predicts that this event will have a negative impact on the profitability of mining operations.

Photo d'ours, de mineur, logos de Bitcoin et de JP Morgan Chase

JP Morgan: A Devastating Bitcoin Halving for Miners?

The upcoming Bitcoin halving in April poses a significant challenge for BTC miners. Firstly, this event will cut their block mining rewards in half, from 6.25 BTC to 3.125 BTC. Additionally, other critical concerns include mining efficiency problems and the possibility of increased electricity costs associated with the mining process.

Many believe that the Bitcoin halving heralds the start of a bull run for the leading cryptocurrency. However, CZ from Binance argues that it’s a mistake to associate the halving with the concept of an All-Time High (ATH).

Halving Bitcoin: a stress test for miners?

This tweet from Blocknews is complemented by a recent article from BeInCrypto based on JPMorgan’s latest report on halving bitcoin 2024. According to this report, the Bitcoin network will experience a 20% drop in hash rate once this milestone is reached. A “crucial moment” for the industry.

JP Morgan estimates that halving the rewards for BTC miners could generate around $20 billion, based on current Bitcoin prices.

It should be pointed out, however, that halving bitcoin will inevitably impact on the profitability of the bitcoin mining sector. At the same time, this event will accelerate the phasing out of a large number of less efficient mining machines. This would represent around 20% of the Bitcoin network’s hashrate.

Its Ranking of the Best Bitcoin Miners

By “best”, the financial giant set out a few criteria in its report:

“[Strong mining operators with a relative value to their] existing hashtrate, operational efficiency, energy contracts, funded growth plans and liquidity,” said Reginald Smith and Charles Pearce, analysts at JPMorgan.

JP Morgan’s top 5 BTC miners are as follows:

  • CleanSpark (CLSK), with an Overweight rating and target price of $5.50;
  • Marathon Digital (MARA), with an underweight rating and a target price of $5;
  • Riot Platforms (RIOT), underweight with a target price of $6.50;
  • Cipher Mining (CIFR), neutral;
  • Iris Energy (IREN), from neutral to overweight.

“We believe CLSK, our top pick, offers the best balance in terms of scale, growth potential, energy costs and relative value,” reads JP.

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Mikaia A. avatar
Mikaia A.

La révolution blockchain et crypto est en marche ! Et le jour où les impacts se feront ressentir sur l’économie la plus vulnérable de ce Monde, contre toute espérance, je dirai que j’y étais pour quelque chose

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.