In a recent publication, JPMorgan has forecasted a 20% decline in Bitcoin’s (BTC) hash rate following its halving event scheduled for April 2024. The bank anticipates that approximately 80 exahashes per second (EH/s) will be removed from the Bitcoin network due to the retirement of outdated and less efficient mining equipment. According to the report, the Bitcoin (BTC) mining industry is currently facing a critical juncture.
JPMorgan also mentions that Bitcoin’s four-year block reward opportunity is estimated at approximately $20 billion. It’s worth noting that this projection is based on BTC’s current price, which has experienced a decline of approximately 72% over the past two years. The report provides context by noting that this figure reached a peak of roughly $73 billion in April 2021 and has fluctuated between $14 billion and $25 billion over the past year.
Furthermore, within the report, JPMorgan highlights several BTC mining companies. Among these, CleanSpark is the bank’s preferred choice. The report explains, “We believe that CLSK, our top selection, presents the most favorable combination of scale, growth potential, competitive power costs, and relative value.”
JPMorgan Analyzes the Potential Impact of a Spot Bitcoin ETF
As per the bank’s report, the potential approval of an Exchange-Traded Fund (ETF) linked to actual Bitcoins (spot BTC ETF) has the potential to trigger a fresh upsurge in the market. This surge, however, would occur amid declining hash rates and diminishing block rewards. Nevertheless, the bank refrained from offering an opinion on whether the U.S. Securities and Exchange Commission (SEC) would grant approval to the spot BTC ETF applications.
The SEC has opted to delay its decision on all such applications, with many speculating that the final decision will likely emerge sometime in the coming year. It’s plausible that the recent partial setback in the Ripple lawsuit might have prompted the SEC to reconsider its approach, potentially leading to hesitance in making a determination regarding spot BTC ETFs. Nonetheless, certain industry experts maintain the belief that the regulatory agency will ultimately have to grant approval for a spot BTC ETF within the United States.