Bitcoin‘s price surged on Tuesday, edging closer to recent record highs as traders awaited further insights into the upcoming halving event and crucial U.S. inflation figures.
The leading cryptocurrency climbed by 2.5% over the past 24 hours, reaching $71,133.3 as of 01:37 ET (05:37 GMT), extending the recovery observed over the weekend. Despite this uptrend, Bitcoin remained slightly below its all-time high of over $73,000, reflecting cautious sentiment in the broader market ahead of pivotal U.S. inflation data scheduled for release on Wednesday.
Halving Event Sparks Optimism
Bitcoin’s upward trajectory was primarily fueled by anticipation surrounding the impending halving event, projected to take place later in April upon the generation of block no. 840,000 on the Bitcoin blockchain. This event will halve the rate of new Bitcoin issuance, potentially tightening the future supply of the cryptocurrency.
Market sentiment suggests that the scarcity resulting from the halving could drive up Bitcoin’s price, making the event a significant focal point for crypto enthusiasts and investors. However, it also poses challenges for smaller Bitcoin miners, as it reduces their mining rewards.
Broader Crypto Market Trends
Bitcoin’s gains had a ripple effect across the wider cryptocurrency market. Ethereum, the second-largest token, surged by 7.6% to $3,688.20, while XRP rose by 4.3% to $0.61785.
Data from CoinShares, a digital asset manager, indicated that although crypto investment products experienced inflows in the week ending April 8, excitement surrounding the approval of spot Bitcoin exchange-traded products appeared to be tapering off. Despite significant inflows, overall capital flows and trading volumes remained below levels seen earlier in the year.
Spot Bitcoin ETF Approval and Ethereum’s Outlook
The U.S. Securities and Exchange Commission’s approval of spot Bitcoin ETFs emerged as a major catalyst for Bitcoin’s price surge in 2024, reinforcing the market’s focus on the cryptocurrency. However, Ethereum faced outflows amounting to $22.5 million amid reports of a SEC investigation into the Ethereum Foundation.
Looking ahead, the SEC is expected to make a decision on spot Ethereum ETFs by late May, a development that could significantly impact Ethereum’s market dynamics and investor sentiment.
As Bitcoin continues to dominate the crypto narrative, market participants remain attuned to both macroeconomic factors and regulatory developments, shaping the trajectory of the cryptocurrency landscape in the months ahead.
