KEY POINTS
- Goldman noted that the prevailing macro conditions today are different from the past
- JPMorgan analysts believe there will be a "downside" on Bitcoin prices post-halving
- Bitcoin has climbed back to $63,000 after it slumped to $60,000 Wednesday
Two of the world's most prominent investment banking giants warned that the expected April 20 Bitcoin halving won't have the same pattern as other cycles, considering the different macro trends that surround the much-anticipated event this time.
Goldman Sachs was first to warn its clients to not rely too much on previous halving cycles wherein Bitcoin prices spiked after the event that sees the rewards for mining the digital currency are split in half. The previous halvings saw BTC prices propelled by increased demand and low supply.
"Historically, the previous three halvings have been accompanied by BTC price appreciation after the halving, although the time it took to reach the all-time highs differs significantly. Caution should be taken against extrapolating the past cycles and the impact of halving, given the respective prevailing macro conditions," Goldman's Fixed Income, Currencies and Commodities and Equities unit told clients in a note earlier this week that was seen by CoinDesk.
The previous halving events took place in financial environments that were more stable compared to today's. Aside from spiking interest rates, it has also become apparent that geopolitical factors can also affect the price of the world's largest cryptocurrency by market cap, as seen over the weekend following Iran's attacks on Israel.
JPMorgan, another investment banking titan, had a similar outlook of this year's halving. "We do not expect bitcoin price increases post-halving as it has already been priced in," JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a Wednesday note, as reported by The Block. "In fact, we see a downside for the bitcoin price post-halving," they said.
Among their reasons for a bearish view of BTC prices after the halving is that Bitcoin's current price is still very much above the investment banking firm's adjusted price of $45,000. It also remains above the predicted production cost post-halving which is at $42,000, the analysts pointed out.
The warnings come as Bitcoiners anticipated the halving event that will make new coins scarcer. While there have been expressions of fear and concern among crypto holders who watched the world's first decentralized cryptocurrency fall dramatically to $63,000 from its stellar new all-time high of $73,000 last month, the community, in general, remains optimistic.
Momentum just started building up Thursday as the digital coin climbed back to $63,000 following a devastating nosedive to $60,000 late Wednesday. Bitcoin maximalist Michael Saylor rallied the community on X (formerly Twitter), saying the world must "face the future" – one where Bitcoin leads the financial realm.
