Overview: Felix, PANews
The JPMorgan analyst team, led by senior strategist Nikolaos Panigirtzoglou, released a research report on December 4. The report points out that despite the decline in Bitcoin's hashrate and the rising costs of mining intensifying the downward pressure on Bitcoin, the actions of Strategy (formerly MicroStrategy, stock code MSTR) are crucial to Bitcoin's near-term outlook.
Analysts indicate that the recent decline in Bitcoin's hashrate and mining difficulty has put downward pressure on Bitcoin's price. The decline can be attributed to the People's Bank of China reiterating its ban on Bitcoin mining and trading, as well as high-cost miners exiting due to rising electricity prices and falling Bitcoin prices, leading to decreased profitability; some miners have been forced to sell off their Bitcoin.
The mining cost of Bitcoin has decreased from $94,000 last month to $90,000. Nevertheless, Bitcoin's price is still below this mining cost, leading to further selling pressure. Analysts state that assuming the electricity price is $0.05 per kilowatt-hour, if the electricity price rises by $0.01 per unit, high-cost miners' mining costs will increase by $18,000.
Whether mNAV can maintain 1.0 is crucial.
Even so, JPMorgan believes that miners are not the key to Bitcoin's next movement; the scale and stability of the Strategy's holdings are more decisive.
The report emphasizes that whether the Strategy can maintain its enterprise value to Bitcoin holdings ratio (mNAV) above 1 and avoid selling Bitcoin is the key driving factor for Bitcoin's recent price trend.
Currently, the ratio is about 1.13, and as long as it stays above 1.0, the Strategy does not need to tap into its holdings of approximately 650,000 Bitcoins to pay convertible bond interest or preferred stock dividends. The company's cash reserves of $1.44 billion are also sufficient to cover all cash obligations for the next two years, which will significantly alleviate market panic.
If the ratio remains above 1.0, and the Strategy can ultimately avoid selling Bitcoin, market confidence is likely to recover quickly, and the worst period for Bitcoin prices will be over. If the ratio drops below 1.0, or if large-scale passive fund selling of Strategy stocks triggered by the MSCI index adjustment on January 15, 2026, forces the company to liquidate Bitcoin, it could trigger a new round of vicious cycles.
MSTR has been removed from MSCI, and the risk has been 'absorbed'.
Despite the market currently closely monitoring whether MSCI will remove the Strategy and other Digital Asset Management companies (DAT) from its stock index, JPMorgan states that the downside risk from the removal decision is limited, as this risk 'has been fully absorbed by the market.'
Since MSCI first announced consultations on October 10, the share price of the Strategy has fallen by about 40%. Analysts believe this drop indicates that the market has already factored in the risk of being removed by MSCI, and may even have considered the risk of being removed from all major stock indices.
Last month, analysts estimated that if MSCI removed the Strategy, it would lead to an outflow of $2.8 billion; if all other stock indices followed suit, it would lead to an outflow of $8.8 billion. At that time, Michael Saylor, co-founder and executive chairman of the Strategy, stated: 'Index classification does not define us. Our strategy is long-term, and our faith in Bitcoin is unwavering.'
Nevertheless, analysts state that the decision made by MSCI on January 15 will still be crucial for the trends of the Strategy and Bitcoin. If removed, it may only bring limited downside pressure. If MSCI continues to keep the Strategy in its index, both the Strategy and Bitcoin 'may rebound strongly,' returning to levels before October 10.
JPMorgan also points out that the mining cost of Bitcoin has historically acted as a support level. If Bitcoin prices remain below their mining cost for a long time, miners may face greater pressure, leading to further declines in mining costs.
However, JPMorgan maintains a long-term optimistic outlook on Bitcoin, theoretically putting Bitcoin's price close to $170,000, which means that if market conditions stabilize, Bitcoin could appreciate significantly in the next 6 to 12 months.
(The above content is excerpted and reproduced with permission from partner PANews, original link)
"JPMorgan: Bitcoin could reach $170,000, 'The key is whether Strategy can hold without selling coins'" This article was first published on (Blockchain Client).
