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JPMorgan: Bitcoin halving is already priced-in

source-logo  cryptopolitan.com 25 February 2024 03:14, UTC

Let’s get straight to the point: everyone’s got their eyes on Bitcoin as it dances around the $50,000-$52,000 mark, with the big halving event right around the corner in April 2024. Banking heavyweight JPMorgan is throwing a bit of cold water on the hype, suggesting that the halving’s effects are already baked into the price. So, if you’re banking on a price explosion post-halving, you might want to temper those expectations.

Retail investors, bless their hearts, are all geared up for this halving. After taking a little breather in January, they’re back in the game, drawn by the recent upticks in Bitcoin and Ethereum. JPMorgan’s analysts, led by Nikolaos Panigirtzoglou, have been keeping an eye on the action, noting an interesting trend: the flow of BTC into smaller wallets has outpaced institutional investors. This uptick comes despite the introduction of new spot Bitcoin ETFs, which is something to chew on.

The Retail Frenzy and Institutional Caution

Retail investors are practically chirping, diving back into the crypto fray with enthusiasm that’s been missing for a bit. JPMorgan’s team thinks this resurgence in February is all about looking forward to some big events in the crypto industry: the Bitcoin halving, Ethereum’s next big update, and the potential green light for spot Ethereum ETFs from the SEC in May. However, they’re wagering that the first two events are old news to the market, and the third is a toss-up with a 50% chance of happening.

The current rally in Bitcoin’s price seems to be losing steam, hinting at a possible cooldown as we approach the first week of losses in over a month. The price has been trying to hold above $51,000, but if this downward trend sticks, it’ll be the first negative blip on Bitcoin’s radar since its rally kicked off in late January. Yet, with the halving event on the horizon, there’s still hope for momentum to pick back up.

However, some market analysts are waving caution flags, suggesting the run-up to the halving might not pack as much punch as some hope. Even though the demand from Bitcoin ETFs is blowing past the supply 13 times over, the halving will only widen this gap. Predictions are flying left and right, with some expecting BTC to skyrocket to $273,000 post-halving, while others, like PlanB, think a price crash below $40,000 is unlikely.

Analyzing Bitcoin Halving’s Real Impact

Now, onto the meat of the matter: the Bitcoin halving itself. For those not in the loop, this event cuts the rewards for miners in half, a move designed to keep inflation in check by slowing down the influx of new coins. It’s a clever piece of programming baked into Bitcoin’s DNA, set to happen every four years until all 21 million Bitcoins are out in the wild.

Dessislava Aubert from analytics firm Kaiko points out that leverage is on the rise, with BTC open interest hitting $11 billion for the first time since 2021. It seems traders are betting big on Bitcoin’s price climbing in the short to medium term. But, as always in the crypto market, there are no sure bets.

The halving is a big deal, not just for miners who’ll feel the pinch in their earnings but for investors too. The event usually grabs a lot of attention and can sway market sentiment. Yet, it’s crucial to remember that halvings don’t automatically mean a price surge. Aubert notes that while there’s more excitement this time around, and the crypto scene has matured, the market’s reaction could still go either way.