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JPMorgan Forecasts 20% Bitcoin Hash Rate Drop by April 2024

2 mins
Updated by Kyle Baird
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In Brief

  • JPMorgan's report predicts a 20% drop in Bitcoin Network Hash Rate post the Bitcoin halving in April 2024.
  • The Bitcoin mining industry is at a "crucible moment" with the upcoming halving, which would cut miners' rewards by half.
  • It designates CleanSpark as its "top pick" among BTC mining firms, despite Marathon Digital being the largest operator.
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JPMorgan has released a report forecasting a potential 20% decline in the Bitcoin Network Hash Rate following the Bitcoin halving in April 2024.

“We estimate as much as 80 EH/s (or 20% of the network hashrate) could be removed at the next halving (April ‘24) as less-efficient hardware is decommissioned,” the report stated.

Anticipated Significant Drop in Bitcoin’s Hash Rate

The research report outlines that the Bitcoin mining industry is at a “crucible moment” in the lead-up to the Bitcoin halving in April 2024. 

The Bitcoin halving occurs every four years, and it involves a reduction in Bitcoin miners’ rewards by half. It aims to mitigate inflation, and the fourth halving will be in April 2024.

It goes on to state that the four-year block reward opportunity totals approximately $20 billion. This prediction is based on Bitcoin’s current price. However, it underscores a substantial decrease of around 72% from a little over two years ago:

“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.”

At the time of publication, Bitcoin’s price is $26,778.

Bitcoin Price Chart 1 Month. Source: BeInCrypto
Bitcoin Price Chart 1 Month. Source: BeInCrypto

JPMorgan lists several Bitcoin mining firms but designates Bitcoin mining firm CleanSpark as its preferred option:

“We believe CLSK, our top pick, offers the best balance of scale, growth potential, power costs, and relative value.”

However, the investment firm notes while Marathon Digital is the largest operator, it has the highest energy costs and lowest margins.

Bitcoin Mining Speculations Before Halving

Marathon Digital provides an operational summary on its website, noting that the figures are rough estimates. However, the company asserts that it currently has approximately 155,910 operational miners worldwide.

Marathon Digital Operations Summary. Source: Marathon Digital
Marathon Digital Operations Summary. Source: Marathon Digital

Meanwhile, it believes Riot Platforms has fairly low power costs and liquidity.

Conversely, BeInCrypto recently reported that the four-year cycles may not be related to Bitcoin halving, as commonly assumed.

Referencing recent online commentary, ‘Pledditor,’ a Bitcoin enthusiast, questions the widespread assumptions.

“Bitcoin’s four-year cycles are just coincidences and have little to do with the halvenings.”

Nevertheless, the forthcoming halving has generated enthusiasm among Bitcoin mining firms.

On August 16, BeInCrypto reported that Bitcoin infrastructure company Blockstream is acquiring Bitcoin mining rigs with the expectation that the assets will appreciate in value after April 2024.

Top crypto platforms in the US | February 2024

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All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Ciaran Lyons
Ciaran is a cryptocurrency journalist based in Sydney, Australia. He particularly enjoys writing about CBDC developments and the practical implementations of cryptocurrency in real-world scenarios. He has also appeared across major television networks in Australia including Channel Ten, Channel Nine and SBS TV. Prior to his foray into cryptocurrency, Ciaran worked as a presenter on national radio station Triple J.
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