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little changed at $66,000 as rate jitters spur capital outflows From Investing.com
The price remained little changed on Tuesday as the halving event passed with insignificant price movement, while capital outflows from investment products continued amid uncertainty over higher interest rates for a longer period.
While the launch of a new protocol on the Bitcoin blockchain has spurred increased activity on the chain, the move has offered little support to the token’s price. The launch also largely overshadowed the halving event.
Bitcoin fell 0.05% over the past 24 hours to $65,967.1 as of 08:54 ET (12:54 GMT).
Bitcoin price is falling as ETFs experience sustained outflows
Data from digital asset manager CoinShares showed on Monday that Bitcoin investment products, particularly ETFs, saw outflows of about $192 million in the week ended April 21.
Overall trading volumes also fell due to waning enthusiasm for the launch of spot Bitcoin ETFs earlier this year. U.S. ETFs, in particular, saw outflows of $244 million last week, CoinShares said in a report.
While the launch of spot ETFs pushed Bitcoin prices to record highs in March, the token has remained largely capped between $60,000 and $70,000 over the past month as ETF enthusiasm waned.
Cryptocurrency ETFs have seen sustained outflows in recent weeks as markets have grown more dubious about early interest rate cuts by the Federal Reserve. Lower interest rates have remained the primary driver of long-term cryptocurrency gains, as the sector benefits from increased speculation in a highly liquid environment.
But the prospect of higher interest rates for a longer period, following hawkish Fed signals and sticky inflation data, presents a less favorable environment for cryptocurrencies.
Cryptocurrency Price Today: Altcoin Slightly Higher
Other crypto tokens saw mixed price action on Tuesday, although they remained largely range-bound amid few positive signals for the sector.
The world’s No. 2 token fell 0.5% to $3,184.91, while rising 0.45% and 2%, respectively.
But further altcoin gains were limited as cryptocurrency traders remained largely biased towards Bitcoin.
Demand for Bitcoin after halving will be 5 times greater than supply, says report
Despite tight crypto token prices, crypto stocks posted some gains on Monday, as the impact of the halving event, which halves mining rewards, was largely overshadowed by a spike in Bitcoin transaction fees, to levels record.
This spike was spurred by the launch of the “Runes” protocol on Bitcoin, which allows users to mint tokens on the world’s largest blockchain.
Marathon Digital (NASDAQ:) Holdings Inc (NASDAQ:MARA), Coinbase Global Inc (NASDAQ:), Riot Platforms (NASDAQ:) and MicroStrategy Incorporated (NASDAQ:MSTR) rose between 6% and 13% on Monday.
Meanwhile, the latest halving of Bitcoin mining rewards could have a significant impact on the market, potentially causing demand for the cryptocurrency to outstrip supply by five times, according to analysts at cryptocurrency exchange Bitfinex.
On Saturday, the reward for each block mined was reduced from 6.25 BTC to 3.125 BTC.
Bitfinex estimates that this reduction in mining rewards will reduce the notional value of new coins entering the offering each day to $30 million, which is five times lower than the average daily demand for US spot ETFs.
“With the daily issuance rate declining post-halving, we estimate that new supply added to the market (new BTC mined) would amount to approximately $40-50 million in notional USD terms based on issuance trends,” he said Bitfinex in a report. seen by Coindesk.
“It is anticipated that this figure could drop over time to as much as $30 million per day, including active and dormant supply, as well as miners’ sales, especially as smaller mining operations are forced to close up shop,” they added .
“Average daily net inflows from spot Bitcoin ETFs dwarf that figure above $150 million, although flows have moderated and even turned negative in recent weeks,” the analysts noted.