What’s happening in the crypto market? Is Bitcoin rising, or is crypto dying? Find answers to all these questions and more in our weekly crypto news round-up.
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Bitcoin Post-Halving: How Did The Crypto Market React?
Bitcoin’s fourth halving event, which occurred after the mining of Bitcoin’s 840,000th block, reduced the block reward from 6.25 BTC to 3.125 BTC, tightening the daily issuance of new coins. Historically, such events have preceded bullish trends in the market due to the reduced rate of new Bitcoin entering circulation, and early indications suggest that this pattern may continue.
Post-halving, Bitcoin’s price experienced an immediate uplift, trading at around $63,960, marking a slight increase from prior levels. This positive movement indicates that market participants might be reacting optimistically, expecting a supply squeeze that could push prices higher as seen in past cycles.
In contrast to previous halvings, the run-up to the 2024 event was characterized by a remarkable surge in Bitcoin’s price, reaching all-time highs just before the halving. This was unlike past cycles where significant price increases typically occurred post-halving. The introduction of Bitcoin ETFs in the U.S., which started trading in January 2024, has also introduced a new dynamic, potentially increasing institutional participation and investment in Bitcoin.
Miners — at least for now — also seem to have adapted to the new economic environment brought about by the halving. Despite the reduction in block rewards, improvements in mining efficiency and control over costs, such as electricity, have left miners in a relatively stable position. The pre-halving price appreciation has further benefited miners, allowing them to sustain operations under tighter reward conditions. Additionally, the Bitcoin network has become more secure and globally decentralized, with a significant reduction in the concentration of mining power that was once dominated by China.
What does this mean for the crypto market?
The overall market sentiment is buoyant, with expectations that the tightened supply, combined with sustained or growing demand, will lead to price increases in the long term. While short-term volatility is expected as the market adjusts to the new supply dynamics and reacts to global events, the long-term outlook for Bitcoin remains positive, supported by both technical and fundamental factors.
BlackRock’s Bitcoin ETFs Records Its First Zero-Inflow Day
The BlackRock iShares Bitcoin Trust (IBIT) recently recorded its first day with zero inflows since the introduction of Bitcoin exchange-traded funds (ETFs) in the United States on January 11. This marked a notable shift after a significant 71-day streak of consistent daily inflows, during which IBIT amassed nearly $15.5 billion. This halt in inflows is not unique to BlackRock’s ETF; other market participants also experienced similar trends, indicating a broader slowdown in the sector.
The performance of other Bitcoin ETFs in the U.S. last week reflects a mixed picture. While most ETFs followed BlackRock’s lead with minimal or zero inflows, Fidelity Wise Origin Bitcoin Fund (FBTC) and ARK 21Shares Bitcoin ETF (ARKB) recorded inflows of $5.6 million and $4.2 million, respectively, on the same day BlackRock saw no new inflows. In contrast, the Grayscale Bitcoin Trust (GBTC) faced substantial outflows, losing $130.4 million in a single day, contributing to a net outflow of $120.6 million across all Bitcoin ETFs for that period.
Historically, the introduction of Bitcoin ETFs in the U.S. has been viewed positively, attracting significant institutional and retail investment. Since their inception, U.S. Bitcoin spot ETFs have collectively amassed over $4.926 billion in inflows. However, recent trends show a slowdown in inflows, particularly in April, influenced by broader market conditions including a downturn in Bitcoin’s price and a challenging macroeconomic environment.
What does this mean for the crypto market?
The significance of BlackRock’s IBIT experiencing its first zero-inflow day can be viewed in several ways. Analysts suggest that days with zero inflows are common among ETFs and should not necessarily be seen as indicators of failing market interest but rather as part of normal market fluctuations. Such events underscore the volatility and the rapidly changing dynamics within the cryptocurrency investment landscape. They also highlight the sensitivity of crypto markets to broader economic indicators and investor sentiment, which can swiftly shift due to factors like changes in regulatory landscapes, macroeconomic conditions, or shifts in investor strategies.
The Bitcoin ETF market continues to evolve, with each fund experiencing its unique flow patterns influenced by both market conditions and individual fund characteristics. Crypto ETFs are also a global phenomenon — spot crypto ETFs will begin trading in Hong Kong next week. As the market matures, these funds are likely to continue playing a significant role in shaping the accessibility and attractiveness of Bitcoin as an investment asset.
Are Bitcoin and other cryptocurrencies going down?
Although this past week has been pretty slow for the majority of top players in the crypto market, there were some notable outliers that managed to record significant gains — and, in some cases, outstanding losses. The most curious case was HBAR (+40%), which shot up 96% following misinterpreted news earlier this week, went through a correction, but still ended up with a positive price change as the week came to a close.
The biggest gainers in the top 100, however, were two meme coins: BONK (+77%) and PEPE (+46.8%). The biggest loser was TON (-23.6%). Outside the top 100, POPCAT (+214%) and COS (+103%) both surged in value, while WZRD (-45.3%) and MERL (-43.1%) recorded significant declines.
Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
Good 🥰😍
H