Demand for Bitcoin (BTC) is likely to remain strong over the next year ahead of the next halving of the world’s largest cryptocurrency, according to JPMorgan. said in a June 1 investigation report.
The recent rise in retail demand can be attributed in part to the introduction of Bitcoin’s Ordinals and BRC-20 tokens, but more importantly, “Bitcoin’s retail demand for halving event in April 2024″ is likely to strengthen as it approaches,” the report said.
The Bitcoin halving, in which mining rewards are cut by 50%, “has a positive psychological effect because the production cost of Bitcoin mechanically doubles to about $40,000,” says Nicholas Panigiszo. JP Morgan analysts led by Nikolaos Panigirtzoglou write.
This is because, historically, the cost of production has served as an effective floor for cryptocurrency prices, the report adds.
JP Morgan notes that previous halving events in 2016 and 2020 were “accompanied by a bullish trajectory for the Bitcoin price,” which has accelerated since.
Meanwhile, institutional demand for bitcoin has declined. Uncertainty is mounting as investors are disappointed by “fraud, heightened volatility and year-over-year US regulatory attacks.”
JP Morgan previously noted that after the Silicon Valley Bank collapse, investors saw these asset classes as a “hedge against a catastrophe scenario,” so institutional investors bought gold and retail investors bought bitcoin, with both claimed to have risen strongly.
｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
｜Original: Bitcoin Retail Demand to Remain Strong Ahead of Halving Event: JPMorgan