JPMorgan Forecasts a Drop in Bitcoin’s Hash Rate

According to J.P.Morgan, Bitcoin’s (BTC) hash rate is anticipated to experience a 20% decline post the April 2024 halving event. The reduction is attributed to the potential decommissioning of older, less efficient mining equipment, with an estimated 80 EH/s expected to be subtracted from the BTC network.

JUST IN: JPMorgan forecasts a potential 20% decline in #Bitcoin Hashrate before the next halving, as less-efficient 🦾 hardware gets decommissioned. pic.twitter.com/gGfqdPMkxl

— Bitcoin News (@BitcoinNewsCom) October 13, 2023

Understanding the Impact of the Bitcoin Halving

The Bitcoin halving, a pre-programmed event occurring approximately every four years, is a significant milestone in the crypto world. By design, this event slashes the rewards miners receive for adding a new block to the Bitcoin blockchain by half. With the current reward standing at 6.25 BTC, the upcoming halving will see this reduced to 3.125 BTC per block.

The halving mechanism inherently slows down the rate of new Bitcoin creation, introducing a scarcity factor. If the demand for Bitcoin remains consistent or even increases, this reduced supply could very well lead to a surge in Bitcoin’s value.

Mining Companies under J.P.Morgan’s Lens

In their report, J.P. Morgan analyzed several key players in the Bitcoin mining industry. The bank expressed a favorable inclination towards CleanSpark, describing it as the optimal blend of scale, growth potential, power costs, and relative value. Conversely, Marathon, despite its stature as the premier mining operator, faces the challenges of elevated energy costs and minimized margins.

Riot’s standing is noteworthy due to its low power costs and ample liquidity, yet it holds the distinction of being the priciest stock within JPMorgan’s review. Cipher Mining, boasting the least power expenses among its contemporaries, faces growth limitations.

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