JP Morgan Says Bitcoin Price Will Correct After Halving, Here’s The Target
JP Morgan analysts predict a significant price correction for Bitcoin post-halving, with the price potentially dropping to $42,000. The halving event, which occurs every four years, aims to reduce inflation by cutting the rewards paid to miners in half. Despite historical trends showing price surges following previous halving events, JP Morgan remains bearish on Bitcoin’s future. They highlight the impact on mining profitability and potential concentration within the mining sector. Production costs post-halving could surge to $53,000, leading to a decline in Bitcoin’s network hash rate and potentially causing small mining businesses to go out of business.
JP Morgan analysts have recently weighed in on the highly anticipated Bitcoin halving event, which is set to take place in May 2020. According to a report by the financial giant, JP Morgan believes that the price of Bitcoin will correct after the halving, and they have even set a target for where they think the price will fall to.
The Bitcoin halving event, which occurs approximately every four years, is when the number of new Bitcoins being created is cut in half. This event is significant because it reduces the supply of new Bitcoins entering the market, which can impact the overall price of the digital currency.
According to JP Morgan, the price of Bitcoin has already priced in the halving event, with the price of the cryptocurrency rising significantly in the lead up to the event. The analysts believe that after the halving takes place, there will be a correction in the price of Bitcoin as investors take profits and the hype around the event dies down.
“In our view, this rally has all the hallmarks of a speculative mania, driven by a mix of unwarranted optimism, faith in a new technology, and fear of missing out,” the analysts wrote in the report.
JP Morgan set a target price of $7,975 for Bitcoin after the halving event, which represents a significant correction from its current price of around $9,000. The analysts believe that this correction is necessary in order to bring the price of Bitcoin back to more sustainable levels.
While the analysts at JP Morgan are cautious about the price of Bitcoin in the short term, they do believe that the long-term outlook for the cryptocurrency is positive. They believe that Bitcoin has the potential to become a viable alternative to traditional currencies and could be used as a store of value in the future.
However, they warn that the road ahead for Bitcoin will not be smooth, and investors should be prepared for volatility in the price of the cryptocurrency.
The report from JP Morgan comes at a time when Bitcoin has been experiencing a surge in popularity and interest from investors. The price of Bitcoin has risen significantly in recent months, with many investors seeing it as a safe haven asset in the midst of economic uncertainty caused by the COVID-19 pandemic.
Despite the positive sentiment surrounding Bitcoin, there are still many skeptics who believe that the price of the cryptocurrency is in a bubble and will eventually crash.
In a recent interview, billionaire investor Warren Buffett said that he would never invest in Bitcoin because he does not understand how it works. He compared investing in Bitcoin to gambling and warned investors to be cautious when it comes to the cryptocurrency.
Other analysts have also expressed concerns about the price of Bitcoin, with some warning that the current rally may be unsustainable. They believe that the price of Bitcoin may be driven purely by speculation and hype, rather than any fundamental value.
Despite these concerns, there are still many investors who are bullish on the future of Bitcoin. They believe that the cryptocurrency has the potential to revolutionize the financial industry and could even become a mainstream form of payment in the future.
One thing is for certain – the price of Bitcoin is highly unpredictable and subject to extreme volatility. While the analysts at JP Morgan may believe that a correction is on the horizon, only time will tell where the price of Bitcoin will ultimately end up after the halving event.
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