Bitcoin‘s price surged close to record highs on Friday, buoyed by hotter-than-expected U.S. inflation data that positioned the cryptocurrency as a potential hedge against the erosion of traditional currencies’ purchasing power.
At 03:00 ET (07:00 GMT), Bitcoin saw a 0.3% increase, reaching $70,965, approaching the previous record of $73,750 achieved last month. The anticipation of the upcoming halving event, which will reduce the rate of new Bitcoin generation, also contributed to the bullish sentiment surrounding the cryptocurrency.
The halving event, expected to occur with the generation of block no. 840,000 on the Bitcoin blockchain next week, is anticipated to halve the rate of new Bitcoin mining. This reduction in supply aligns with the narrative that Bitcoin’s scarcity will drive up its value.
JPMorgan analysts noted that the halving event could have significant implications for the Bitcoin mining industry, potentially leading to consolidation and closures among operators while rationalizing network hashrate and industry capital expenditure.
Despite Bitcoin’s rally, broader cryptocurrency prices exhibited mixed trading as investors assessed the latest U.S. inflation data. Ethereum, the second-largest cryptocurrency, declined by 1.4% to $3,536.1, while Solana dropped 0.2%, and XRP rose by 1%.
The U.S. inflation landscape has left traders discerning favorites within the crypto market, with conflicting reports on the country’s producer price index and consumer price index. While a delay in interest rate cuts by the Federal Reserve could dampen the crypto market’s sentiment, a surge in inflation may drive demand for Bitcoin as a hedge against a weakening dollar.
Bitcoin’s status as a “safe haven” asset, akin to gold, is reinforced by its finite supply and autonomy from governmental monetary policies.
In the realm of crypto exchanges, centralized platforms have witnessed substantial growth in spot trading volume, fueled by the ongoing bull market. Binance emerged as the frontrunner, recording a staggering trading volume of almost $1.15 trillion in March, surpassing competitors like Coinbase by a significant margin.
