Bitcoin price to surge after halving? Morgan Stanley and Deutsche Bank do not agree

According to the Wise Finance app, JPMorgan and Deutsche Bank believe that the positive impact of Bitcoin's upcoming software update "halving" every four years has already been largely reflected in the price. It is understood that halving has long been touted as one of the key factors supporting the value of this cryptocurrency.

Analysts at JPMorgan wrote in a report on Thursday that the main impact will not be on the price of Bitcoin, but on Bitcoin mining. They expect the industry to consolidate as unprofitable miners exit the Bitcoin network, with publicly listed companies most likely to gain market share.

JPMorgan analysts wrote: "Publicly listed Bitcoin miners are in a favorable position to take advantage of the new environment, mainly because they have access to larger financing channels, especially equity financing. This helps them expand their operations and invest in more efficient equipment."

Similarly, analysts at Deutsche Bank also do not expect a significant increase in the price of Bitcoin after halving. The bank's analysts stated that since the Bitcoin algorithm has already factored in the halving, this event has been digested in the market.

This event has been taken into consideration in the market. Mining rewards refer to a fixed amount of Bitcoin released from the network to compensate miners for verifying transactions. According to data from the cryptocurrency mining analysis website mempool.space, this modification may take effect later on Friday.

Deutsche Bank's analysts wrote that in the past, after Bitcoin halving, the hash rate, which measures the total mining capacity of the industry, usually decreases as some miners are squeezed out of the market due to high prices. "With the reduction in mining rewards, the process of speculating hash values and adding blocks to the blockchain is less profitable."

According to Deutsche Bank's data, after the previous three Bitcoin halvings, the hash rate plummeted by 25%, 11%, and 25% respectively.

Despite the expectation of no drastic price fluctuations, Deutsche Bank still believes that Bitcoin prices will remain high due to expectations of the approval of a spot Ethereum ETF, central bank interest rate cuts, and regulatory changes.

They wrote: "In addition, the surge in second-layer solutions and DeFi activities enhances the network's actual utility, which is beginning to be very favorable for the Bitcoin ecosystem and the broader crypto space."

Currently, the United States accounts for 40% of the total Bitcoin mining. However, both JPMorgan and Deutsche Bank believe that some Bitcoin mining companies may seek to diversify operations in "low-energy cost areas" (such as Latin America or Africa) to position their inefficient mining supplies and extract value from those originally idle mining machines