Bitcoin Likely to Drop After the Halving, JPMorgan Says (2024)

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Bitcoin Likely to Drop After the Halving, JPMorgan Says? ›

JPMorgan said it expects bitcoin to fall after the reward halving. The bank's analysis shows that the cryptocurrency remains overbought. Miners will be most affected by the event, the report said.

Bitcoin price post-halving. Image: Bernstein. “Historically, bitcoin has experienced notable price increases in the six months following each halving event. In fact, bitcoin reached new all-time highs in each four-year period between the previous halving events,” Binance CEO Richard Teng told The Block.

For instance, after the first halving, the reward for bitcoin mining dropped to 25 BTC per block. The last halving should occur in 2140. At that point, there will be 21 million BTC in circulation and no more coins will be created. From there, miners will just be paid with transaction fees.

Bitcoin's 2021 fractal indicates more pain

That brings BTC's downside target to around $46,110 by June, a level aligning with its 0.618 Fibonacci retracement line. A decisive break below the 50-week EMA will risk sending the price toward the 200-week EMA at around $32,410, down about 58% from the current price levels.

Analyzing the effect of halvings

On average, Bitcoin has increased roughly 125% in halving years. However, the year after a halving tends to produce the best gains. In the year after a halving, Bitcoin returned a whopping 415% on average. That means an investment of $1,000 would be worth more than $5,000.

After the halving, the rate of issuance of new bitcoin as well as the rewards for successful bitcoin miners are cut in half. There can only be 21 million bitcoin, and fewer new tokens entering circulation could impact bitcoin prices. That's why the halving is watched closely by miners and investors alike.

If Bitcoin continues this pattern into 2030, the price could peak around 2029 or 2030. If Wood is correct and Bitcoin reaches $3.8 million, if you invested $1,000 in Bitcoin now, it would be worth $54,280 in 2030. This would result in a compounded annual growth rate (CAGR) of nearly 95%.

Bitcoin's Price History

Notably, Cathie Wood, CEO of Ark Invest, predicted that bitcoin could reach an astounding $1.48 million by 2030. Obviously, the world's oldest cryptocurrency has come a long way since its first recorded price of less than a cent.

How many days after Bitcoin halving does it hit peak? ›

Twice, from nadir to all-time high it's about 1,065 days (1,062 and 1,068). From halving to all-time high it's been about 535 days (525 and 548).

The monetary policy of Bitcoin allows for a total of 32 halvings of which three took place since its inception. So, there are 29 halvings left which amounts to roughly 116 years. The last halving will be in 2140.

Bitcoin halving is considered bullish because each event reduces the rate at which future bitcoins are created. This then boosts the scarcity and value of existing bitcoins.

Bitcoin halving is an event that takes place approximately every four years, which sees the number of bitcoins released as mining rewards decrease by 50%. Currently the Bitcoin reward is 6.25 BTC. However, after the fourth halving, the reward will fall to 3.125 BTC.

Analysts at research and brokerage firm Bernstein expect bitcoin to resume its bullish trajectory post-halving, reiterating their target of $150,000 by the end of 2025.

In its 2023 Big Ideas report, Ark Invest laid out several price targets for Bitcoin. The report sees Bitcoin hitting price targets in 2030 of $257,500 in the bearish forecast, $682,000 in an average market and $1.48 million in a bullish market.

“The weighted average cash cost of production in Q4 was approximately $29,500; post-halving, it is projected to be about $53,000,” the authors wrote. The average electricity cost of production in the fourth quarter was about $16,300 per bitcoin, which is expected to increase to around $34,900 post the halving.