JPMorgan, a well-known player in the financial industry, highlighted a critical turning point for the Bitcoin mining industry in a recent research report. The report discusses exchange-traded fund (ETF) approval, record hashrates, and the impact of the upcoming halving on the cryptocurrency world. Here are the details…
Bitcoin rally will be triggered by ETF approval
JPMorgan analysts noted the potential impact of ETF approval on the Bitcoin market. Despite the cryptocurrency’s record hashrates and impending halving, the green light for an ETF could serve as a catalyst for a significant rally. The report shows that the upcoming halving is expected to impact the industry’s revenues and profitability. Also, among the players in the Bitcoin mining space, CleanSpark has won the admiration of JPMorgan. This choice stems from a combination of factors such as scale, growth potential, energy costs and relative value. CleanSpark in particular has managed to strike a balance that positions itself as an attractive option for investors.
By contrast, although Marathon is the largest mine operator, it is plagued by the highest energy costs and lowest margins, making it a less attractive option in the eyes of JPMorgan’s analysts. The report also sheds light on Cipher Mining, which has the lowest energy costs among its peers. However, as highlighted by JPMorgan, Cipher Mining’s growth potential appears limited. This dichotomy reflects the complex dynamics in the Bitcoin mining industry, where various factors weigh on a company’s outlook.
What will be the consequences of Halving?
JPMorgan’s report also interestingly discusses the consequences of the halving, that is, the halving of the block reward expected in the 2nd quarter of 2024. Currently, the bank estimates the four-year block reward opportunity at around $20 billion based on the current Bitcoin price. However, according to analysts, the upcoming halving event could have a profound impact on profitability. A key observation from the report is the estimate that around 20 percent of the network’s hashrate could be at risk as less efficient mining devices retire.
As the Bitcoin mining industry stands at this important juncture, the market’s response to these dynamics is critical. Because it will likely determine the trajectory of cryptocurrency mining and related companies. Investors and enthusiasts will be watching developments carefully, especially as the industry continues to evolve in response to regulatory changes and technological advances. Meanwhile, at the time of writing, BTC is trading at $26,870. In the last 24 hours, the 0.79 percent decrease was especially noteworthy. Its live market value is around 524 billion dollars.
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