Bitcoin's latest sell-off is a good entry point for investors ahead of halving, JPMorgan says
The quadrennial bitcoin halving will take place in the coming days, and will reduce the amount of bitcoin rewarded to miners from 6.25 to 3.125.
Getty Images
- JPMorgan says the latest sell-off in bitcoin is a good point for investors to jump in.
- The bank said big gains in March likely means a chunk of the halving rally has already happened.
- The halving will occur in the coming days, slashing the amount of bitcoin entering circulation by half.
Bitcoin extended its decline from all-time highs this week, but JPMorgan says the recent sell-off is a good entry point for investors as the market prepares for the halving in the coming days.
The world's largest cryptocurrency pulled back from the all-time high of $73,835.57 reached in March, and was trading around $62,445 on Thursday morning.
The nosedive since the end of last month has slashed the total market cap of the 14 US-listed bitcoin miners tracked by JPMorgan by 28% to $14.2 billion through April 15, JPMorgan said.
"With the bitcoin halving on the horizon, we expect heightened volatility and trading volume in both bitcoin and mining stock," JPMorgan's Reginald Smith and Charles Pearce wrote in a note on Tuesday. "That said, we think recent weakness offers an attractive entry point."
Before the dip, bitcoin had rallied 43% year-to-date and 130% over the past six months. Smith and Pearce said this means that "a portion of the typical post-halving rally was pulled forward."
Meanwhile, a key metric of bitcoin's mining efficiency — the hash rate, which is also positively correlated with the crypto's price — surged 4% to a record high over the past two weeks.
"Mining profitability declined modestly over the first two weeks of April, as network hashrate growth outpaced bitcoin price appreciation," the note said.
JPMorgan also said they're particularly bullish on Riot Platforms and Iris Energy, noting appealing relative valuations.
The quadrennial bitcoin halving will take place in the coming days, and will reduce the amount of bitcoin rewarded to miners from 6.25 to 3.125.