Bitcoin‘s price remained stagnant on Tuesday, following the much-anticipated halving event, which yielded minimal price action. Concurrently, capital outflows persisted from investment products amidst uncertainties surrounding prolonged higher interest rates.
Despite the launch of a new protocol on the Bitcoin blockchain, which led to heightened on-chain activity, the move failed to significantly bolster the token’s price, overshadowing the significance of the halving event.
Over the past 24 hours, Bitcoin experienced a marginal decline of 0.1%, resting at $66,318.6 by 01:26 ET (05:26 GMT).
According to data from digital assets manager CoinShares, Bitcoin investment products, particularly exchange-traded funds (ETFs), witnessed outflows of approximately $192 million in the week ending April 21.
Moreover, overall trading volumes dwindled, mirroring decreased enthusiasm surrounding the launch of spot Bitcoin ETFs earlier this year. Specifically, U.S. ETFs recorded outflows of $244 million in the past week, as indicated by CoinShares.
While the advent of spot ETFs in March propelled Bitcoin prices to historic highs, the token has since remained relatively rangebound, fluctuating between $60,000 and $70,000, amid diminishing optimism surrounding these ETFs.
In recent weeks, crypto ETFs have sustained outflows as market sentiment turned skeptical regarding potential early interest rate adjustments by the Federal Reserve. Historically, lower interest rates have served as a primary catalyst for long-term crypto gains, fueled by heightened speculation within a high-liquidity environment.
However, the prospect of prolonged higher interest rates, fueled by hawkish signals from the Federal Reserve and persistent inflation data, presents a less favorable landscape for the crypto sector.
Altcoins Display Marginal Strength Amidst Stagnation
While Bitcoin remained subdued, other crypto tokens demonstrated some resilience on Tuesday, albeit remaining largely rangebound amidst sparse positive indicators for the sector.
Ethereum, the second-largest token globally, experienced a modest decline of 1.3%, settling at $3,184.07, while Solana and XRP registered gains of 3.2% and 2.5%, respectively.
Nonetheless, the potential for further altcoin gains remained limited as crypto traders predominantly favored Bitcoin.
Crypto Stocks Rally Amidst Record-Breaking Bitcoin Transaction Fees
Despite the subdued performance of crypto tokens, crypto-related stocks experienced notable gains on Monday, propelled by a surge in Bitcoin transaction fees to unprecedented levels, overshadowing the impact of the halving event.
This surge was catalyzed by the introduction of the “Runes” protocol on Bitcoin, enabling users to mint tokens on the world’s largest blockchain.
Shares of Marathon Digital Holdings Inc (NASDAQ:MARA), Coinbase Global Inc (NASDAQ:COIN), Riot Platforms (NASDAQ:RIOT), and MicroStrategy Incorporated (NASDAQ:MSTR) surged between 6% and 13% on Monday, reflecting investor optimism amidst the evolving crypto landscape.
