The bitcoin (BTC) halving event, scheduled for April, will have a negative impact on the profitability of miners given the reduced rewards and higher production cost and ultimately could mean lower prices for the cryptocurrency, JPMorgan (JPM) said in a Feb. 28 research report.

The bank notes that the bitcoin production cost has historically acted as a lower boundary for BTC prices, and it says this could fall to $42,000 after halving.

The central point of the bank’s estimated production cost range is currently around $26,500, which would mechanically double to $53,000 post-halving. The bitcoin network could also see a 20% decline in its hashrate after halving, which would reduce the BTC estimated production cost and the price to $42,000, the report said.

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“This $42k estimate is also the level we envisage bitcoin prices drifting towards once bitcoin-halving-induced euphoria subsides after April,” analysts led by Nikolaos Panigirtzoglou wrote.

This has implications for miners with higher costs, the bank said. “Bitcoin miners with below average electricity costs and more efficient rigs are likely to survive while those with high production costs would struggle.”

Larger publicly listed bitcoin miners are better placed to endure in this “fight for survival,” the authors wrote, adding that “in a similar fashion to 2022” their market share is expected to increase post-halving.

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