JPMorgan Predicts 20% Reduction in Bitcoin Hash Rate After Halving Event
JPMorgan has released a report stating that the upcoming halving event in April 2024 could lead to a 20% decrease in the Bitcoin hash rate. This reduction would occur as older mining hardware is phased out following the halving. The report estimates that up to 80 EH/s, which represents 20% of the current network hash rate, could be eliminated.
Block Reward Projections Take a Hit
The report highlights the significance of the Bitcoin mining industry as the halving event approaches. Scheduled for April 2024, this event will cut miners’ rewards in half, aiming to control crypto inflation. According to the report, based on Bitcoin’s current price, miners’ four-year block reward potential is approximately $20 billion. This marks a significant decrease of around 72% from its peak of nearly $73 billion two years ago.
JPMorgan Analysts Evaluate BTC Mining Companies
JPMorgan analysts have assessed various mining companies based on their existing hash rate, operational efficiency, power contracts, growth plans, and liquidity. The bank has initiated coverage of several companies including CleanSpark, Marathon Digital, Riot Platforms, Cipher Mining, and Iris Energy. CleanSpark is JPMorgan’s top pick due to its scale, growth potential, power costs, and relative value.
Hot Take: BlackRock Aligns with JPMorgan’s Assessment
Investment management firm BlackRock has been acquiring shares in Bitcoin mining companies, coinciding with JPMorgan’s evaluations. BlackRock currently owns 5.89 million shares (3.8% of the total) in CleanSpark, which is JPMorgan’s top mining pick.
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