Bitcoin halving will benefit publicly listed miners: JPMorgan

The share of publicly traded miners is poised to increase post-halving, JPMorgan said

article-image

Marti Bug Catcher/Shutterstock modified by Blockworks

share

Publicly traded bitcoin miners have a leg up during the halving, say JPMorgan analysts. 

In a new note on the halving, analysts said that the concentration of bitcoin miners is “likely to increase” following the April 19 event, but that the publicly traded bitcoin miners will come out as a winner.

The analysts, led by Nikolaos Panigirtzoglou, believe that the bitcoin network could experience a 20% drop in hashrate post-halving, due to inefficient mining rigs going offline. JPMorgan predicts that the production cost range could drop to $42,000. 

The team based that cost on the average electricity cost, further noting that some miners could have different costs based on their location and mining activity scale.

Read more: The next bitcoin halving is coming. Here’s what you need to know

“Bitcoin miners with below average electricity costs and more efficient rigs are likely to survive while those with high production costs would struggle,” analysts wrote.

The price of bitcoin (BTC), they added, could hover around $42,000 following the halving “euphoria” after April. Bitcoin, ahead of the halving, is hovering around $60,000, hitting highs not seen since November 2021.

April’s halving marks the fourth such event, and historically the price of bitcoin has taken off in the months following. However, the momentum tends to take time.  

Block rewards will drop to 3.215 from 6.25 BTC in a little over a month, which will also put some financial strain on mining companies as the rewards decline and the profitability shrinks. 

Blockworks previously reported that the sector could see consolidation as miners look to reduce power costs and raise capital.

Read more: Bitcoin miner consolidation appears imminent as halving looms

The analysts at JPMorgan echoed experts, adding that the publicly traded miners could be nicely positioned post-halving. 

There are a handful of publicly listed bitcoin miners. The list includes miners such as Marathon, Riot, CleanSpark and Hut 8. 

There are a couple of factors that led Panigirtzoglou’s team to this conclusion. First and foremost, the larger scale mining operations that come with being a publicly traded miner since companies can reduce overhead costs. 

The miners also tend to have fixed agreements with power companies “which along with a more sustainable energy mix help them to lower electricity costs, a major component of the overall bitcoin production cost.”

Read more: Marathon Digital ready to deploy ‘dry powder’ in push to double hash rate

And, finally, “publicly listed miners have access to equity markets. In fact they have been raising larger amounts of equity capital in recent quarters…to fuel their operations via purchases of more efficient mining rigs,” the analysts wrote.

In 2022 — two years after the last halving — the publicly traded miners saw a boost in share due to the price of bitcoin declining, making it harder for smaller and private miners to compete. This scenario, the analysts believe, could repeat itself. 

“We expect the share of publicly listed miners to increase post halving, especially if our call of bitcoin prices drifting lower towards $42,000 after April materializes,” they said.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

4.png

Research

This months PPGC covered four main areas. Firstly, debriefing the progress and status of the mainnet implementation of the Ahmedabad hard fork. Secondly, a retrospective on the testnet phase of the Ahemdabad Hard Fork. Thirdly, an update on PIP-36 which involves replaying failed state syncs. Lastly, PIP-47 which pushes upgrades to the Polygon Protocol Council.

article-image

Institutions to test out the settlement of “digital assets and currencies” on a network that annually carries more than 5 billion financial messages

article-image

After Bitwise’s XRP ETF filing this week, one industry watcher notes: “Politics will determine whether this happens soon or in a few years”

article-image

Plus, a look back at some of the SEC’s biggest enforcement moves under Gurbir Grewal

article-image

The forward-looking financial system is being championed by several contributors to India’s UPI digital money system

article-image

Multiple teams are pursuing integration cross-chain and off-chain

article-image

An SEC spokesperson told Blockworks the Ripple judgment clashes with Supreme Court precedent and securities laws