Banks Predict Limited Change in Bitcoin's Value After Upcoming Halving
Crypto enthusiasts are gearing up for the Bitcoin halving event, an occurrence every four years where the reward for mining Bitcoin is halved. Initially set at 50 Bitcoins per block in 2008, the reward will decrease to 3.125 Bitcoins following the upcoming halving, anticipated around April 19 or 20.
Despite the reduction in Bitcoin supply this event brings, global banks have assessed that any potential price increase has already been accounted for, with little to no significant growth expected thereafter, reported Finews Asia.
Moderate Expectations
Goldman Sachs has expressed that the halving will not significantly alter Bitcoin's medium-term trajectory. The bank highlighted that unlike previous rallies following halvings, the current economic environment does not include low interest rates and stable inflation, factors that previously supported price increases.
Stable High Prices Anticipated
Deutsche Bank also does not foresee a major rally post-halving but predicts that prices will remain elevated. Factors such as anticipated approvals for spot ether ETFs, potential central bank rate cuts, and regulatory changes are expected to support high price levels. Furthermore, increases in layer 2 solutions and decentralized finance activities are likely to enhance the network's utility and support the Bitcoin ecosystem and broader crypto market.
Possible Price Decline
On the other hand, J.P. Morgan analysts foresee potential declines in Bitcoin prices following the halving, citing overbought conditions and the anticipation of these events in current pricing.
Impact on Miners
The most significant effect of the halving is expected to impact Bitcoin miners, according to banks. J.P. Morgan predicts that the reduction in rewards will lead to an exodus of unprofitable miners, a drop in the overall hash rate, and consolidation within the industry. Deutsche Bank notes that regions like Latin America, Asia, Africa, and the Middle East are increasingly attractive to miners due to lower energy costs.
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