Bitcoin Halving Event Could Be A Potential Game-Changer For Mining Industry: JPMorgan

Zinger Key Points
  • Ahead of Bitcoin Halving, Bitcoin prices have been fluctuating between the $66,000 and $69,000 mark during past week.
  • The Bitcoin mining industry is likely to witness a drop in gross profits by around 30 to 40%.

The upcoming Bitcoin BTC/USD halving event, expected on April 20, could impact the Bitcoin mining industry, according to a recent JPMorgan report.

What Happened: The report by analysts Reginald Smith and Charles Pearce highlights the potential implications of the Bitcoin halving event, which will reduce the block reward for mining new bitcoins by 50%. This reduction could lead to a wave of consolidation and business closures within the industry, while potentially benefiting the remaining operators.

The industry’s gross profits, currently estimated at around $2.5 billion per quarter, are projected to decline by 30% to 40%. The network hashrate, a measure of the computational power dedicated to mining, could decrease by as much as 80 Exahashes per second (or 13%) from peak to trough.

Historically, Bitcoin has appreciated significantly in the months following halving events although not immediately. Also, the current market conditions may differ from previous cycles.

Also Read: Marathon, Riot, Hut 8 CEOs Tell Benzinga How Bitcoin Halving Will Impact Miners

Why It Matters: The halving event is a crucial part of Bitcoin’s economic model, designed to regulate the rate of new Bitcoin creation. With the block reward halving every four years, Bitcoin prices have rallied post-halving events due to reduced supply, more efficient miners and increased demand.

Among the companies covered, CleanSpark CLSK is considered the best positioned due to its efficient mining fleet, low all-in mining costs, and favorable hashrate comparisons, which should drive record revenues and profits post-halving.

Conversely, Cipher Mining CIFR is viewed as the worst positioned in the near term, despite having the lowest energy prices, due to tough hashrate comparisons and relatively high overhead expenses, which will weigh on revenue and profit growth.

What’s Next: The influence of meme coins and Bitcoin as an institutional asset class are topics expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

Read Next: Bitcoin Halving 101: Everything Investors Need To Know

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image created using artificial intelligence with Midjourney.

Market News and Data brought to you by Benzinga APIs
Posted In: CryptocurrencyNewsTop Storiesbitcoin halvingbitcoin miningExpert Ideas
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!