Analysts from Wall Street giant JPMorgan recently stated that next year’s Bitcoin halving event could put pressure on BTC miners. In a recently circulated report, the analysts wrote that the reduction in Bitcoin mining rewards would affect the revenues of BTC miners by significantly increasing the flagship cryptocurrency’s production costs.
Analyst Nikolaos Panigirtzoglou wrote in JPMorgan’s latest Flows and Liquidity report that 2024’s Bitcoin halving could be a “stress test” for BTC miners around the world. According to the analyst, the halving would bring down mining rewards from 6.25 BTC to 3.12 BTC.
Speaking on the plight of Bitcoin miners, Panigirtzoglou stated:
While bitcoin halving is seen as having a positive effect on the bitcoin price given the production cost acted historically as a floor, it poses a challenge for bitcoin miners.
Bitcoin halving is one of the most widely anticipated events in the crypto space. The event reduces the block rewards for mining by half and happens once every 210,000 blocks. The last halving event occurred in May 2020, when the block reward went from 12.5 BTC to 6.25 BTC. Historically, BTC’s price tends to go up following a halving event.
The Bitcoin halving event, which is scheduled for the second quarter of 2023, would add to the troubles of BTC miners’, who were already struggling with rising hashrates and electricity costs. According to JPMorgan, miners who spend less on electricity would face fewer troubles as compared to those with a high electricity bill.
JPMorgan’s report stated that the hashrate would likely increase at a slower pace following next year’s Bitcoin halving. The banking giant added that in order to offset the lower mining rewards, BTC’s price and transaction fees would have to increase significantly.