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

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

10 Years of Decentralizing the Future

"We do not expect bitcoin price increases post-halving as it has already been priced in," analysts led by Nikolaos Panigirtzoglou wrote in a report on Wednesday, reiterating their previous similar views. "In fact, we see a downside for the bitcoin price post-halving for several reasons."

JPMorgan continues to advise exercising caution in the crypto markets in the near future due to several factors, including a lack of positive indicators and declining retail investor interest.

The bitcoin halving is programmed to occur every 210,000 blocks, which roughly translates to once every four years. Given this schedule, the next halving event is expected to occur in 2028 when the total number of mined bitcoin blocks reaches 1,050,000.

Halvings reduce the rate at which new coins are created and thus lower the available amount of new supply. Bitcoin last halved on April 19, 2024, resulting in a block reward of 3.125 BTC. The final halving is expected to occur in 2140, when the number of bitcoins circulating will reach its maximum supply of 21 million.

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.

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).

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Is bitcoin halving bullish? ›

Bitcoin halving is considered bullish because each event reduces the rate at which future bitcoins are created.

Our most recent Bitcoin price forecast indicates that its value will increase by 11.29% and reach $77,012 by May 27, 2024.

10 Years of Decentralizing the Future. 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.

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.

The supply of bitcoins is replenished at a set rate of one block every ten minutes. The system design reduces the number of new bitcoins in each block by half every four years. There are only about 1.5 million bitcoins left. Experts predict that the last bitcoins will be mined by 2140.

The block reward helps miners cover the high costs of mining. Every four years however, the algorithm cuts the block subsidy in half in an event called the halving. This process will continue until around the year 2140, when the flow of new bitcoin will drop from one satoshi per block to zero.

It is impossible to predict Bitcoin's price movements with certainty. Given the volatility of Bitcoin it is probable that the price will see a dramatic fall again at some point in the future that could be defined as a crash.

The fourth Bitcoin halving was completed on April 2024. It is difficult to predict the exact date of the next halving as it depends on the block height. Since halving happens every 210,000 blocks, the next Bitcoin halving is expected to occur in 2028.