JPMorgan and Goldman Sachs issued bearish warnings ahead of the decline in Bitcoin

America's two biggest banks are urging crypto investors to be cautious around the upcoming Bitcoin halving, which analysts believe may not play out like previous cycles.

In a report on Wednesday, JPMorgan predicted that the price of Bitcoin will not increase following the event, and that it is very likely to continue the decline that began earlier this month.

Could the halving be boring for Bitcoin?

The bank's outlook remains consistent with its relatively dovish forecasts for the rest of the year, refusing to buck the optimism surrounding the Bitcoin spot ETF or halving.

“We do not expect prices to rise after the halving,” wrote analysts led by Nikolaos Panigirtzoglou. “In fact, we see a downside to Bitcoin's halving for a number of reasons.”

The analyst used the price of gold as a reference point, as both assets share the same investment research as a risk-based store of value and inflation. On a volatility-adjusted basis, the bank argued, Bitcoin's value should only be $45,000, meaning its current market value ($63,700) is significantly overbought.

Supporting their case is the continued long bias in open interest in Bitcoin futures and the dearth of venture funding in the crypto industry this year.

“Bitcoin's technical picture is very worrisome as we haven't seen any improvement since we didn't see any price declines on Friday and Saturday,” FxPro market analyst Alex Kuptsykevich added in an email to Forbes. “On the contrary, the market seems to have adjusted to the current price of halving.”

Goldman's Bitcoin View

In a note to clients last week, Goldman Sachs acknowledged that Bitcoin's past three semi-cycles have seen significant price increases — although the exact time it took to reach new highs after that varies widely.

This cycle looks even more different: Bitcoin already topped the previous cycle's all-time high above $69,000 in March, a month before the halving happened.

“Caution should be taken not to overextend past cycles and halve the impact,” analysts said.

The halving itself is later this week, expected on April 20 at 01:44 UTC. Whether or not it results in a “buy the rumor, sell the news” phenomenon in the short term, Goldman thinks BTC's immediate price action is irrelevant.

“Bitcoin price performance will continue to be driven by the aforementioned supply-demand dynamic and ongoing demand for bitcoin ETFs, which coupled with the self-changing nature of crypto markets is a major determinant of spot price action,” he said.