Bitcoin experienced a robust resurgence on Monday, reclaiming its losses from the previous week and surpassing previous highs, fueled by sustained capital inflows into exchange-traded funds (ETFs) and excitement surrounding the upcoming “halving” event. The world’s largest cryptocurrency, currently trading at $70,578.9 as of 14:02 ET (18:02 GMT), saw an impressive 8% increase.
Last week, Bitcoin faced a downturn, dipping as low as $60,000 after reaching record highs, as traders opted to capitalize on profits generated during its recent meteoric rise. However, the cryptocurrency swiftly rebounded from these lows, bolstered by continued capital injections into recently approved spot ETFs. Nevertheless, ongoing outflows from Grayscale Bitcoin Trust (GBTC) applied some pressure on Bitcoin’s spot prices.
Anticipation surrounding the imminent “halving” event, which will see the Bitcoin network’s issuance of new tokens cut in half, further bolstered investor sentiment towards the cryptocurrency.
Scheduled to coincide with the generation of the 740,000th block, the precise timing of the halving event remains uncertain. Nonetheless, market participants anticipate a reduction in Bitcoin’s supply, contributing to the bullish outlook for the cryptocurrency.
However, the dollar’s strength hindered Bitcoin’s full recovery, with the greenback reaching a one-month high on Monday. Investor preference for the dollar as a high-yielding, low-risk currency was reinforced by dovish signals from major central banks worldwide.
The release of key data, particularly the personal consumption expenditures data, which serves as the Federal Reserve’s preferred inflation gauge, scheduled for Friday, is expected to provide further insight into U.S. interest rate movements. Additionally, a series of speeches by Federal Reserve officials throughout the week will offer clues about the central bank’s plans for interest rate adjustments in 2024, following last week’s indication of potential cuts totaling 75 basis points this year.
In a broader context, the positive sentiment in the crypto market was amplified by BlackRock’s entry into asset tokenization. The world’s largest asset manager introduced ‘BUIDL,’ a tokenized asset fund built on the Ethereum network, marking BlackRock’s debut in issuing a tokenized fund on a public blockchain.
Furthermore, Bitcoin’s upward momentum may have been buoyed by a decrease in selling pressure from the Grayscale Bitcoin Trust (GBTC), attributed in part to Genesis’ sale of shares.
Lastly, macroeconomic indicators signaled a bullish outlook, with the Swiss National Bank (SNB) unexpectedly lowering its benchmark interest rate, signaling the commencement of a global easing cycle. This move was echoed by the Central Bank of Mexico, with expectations of similar actions from the Federal Reserve, the European Central Bank, and the Bank of England in the near future.
