In a recent report, JPMorgan predicted that Bitcoin’s (BTC) hash rate will fall 20% after its halving event in April 2024. The bank estimates as much as 80 EH/s to be removed from the BTC network. The reason behind the forecast is the decommissioning of old and less efficient machines. As per the report, the Bitcoin (BTC) mining industry is at a “crucible moment.”
JPMorgan also states that Bitcoin’s (BTC) four-year block rewards opportunity is around $20 billion. Although the prediction is based on BTC’s current price, it has dropped by around 72% in the last two years. The report states, “For context, this figure peaked at roughly $73 billion in April ‘21 and has fluctuated between $14 billion and $25 billion over the past year.”
Furthermore, in its report, JPMorgan lists several BTC mining firms. However, the bank named CleanSpark as its preference. The report states, “We believe CLSK, our top pick, offers the best balance of scale, growth potential, power costs, and relative value.”
JPMorgan on spot Bitcoin ETF
According to the bank’s report, the approval of a spot BTC ETF (Exchange-Traded Fund) could be the catalyst for a new rally. However, the rally would take place on the backdrop of falling hash rates and block rewards. Nonetheless, the bank did not give an opinion on whether the U.S. SEC (Securities and Exchange Commission) will approve the spot BTC ETF applications or not.
The SEC has decided to postpone its decision on all applications, and many expect the decision to come out sometime next year. It is possible that the partial defeat in the Ripple lawsuit may have led the SEC to rethink its strategy. It is possible that the agency does not feel competent at the moment to roll out a decision on spot BTC ETFs. However, some industry experts believe that the financial watchdog will eventually have to approve a spot BTC ETF in the U.S.