Bitcoin price saw a rise on Monday, recuperating some losses from the previous week as continuous capital inflows into exchange-traded funds (ETFs) and anticipation surrounding the upcoming “halving” event boosted the world’s largest cryptocurrency.
As of 01:46 ET (05:46 GMT), Bitcoin surged 4.9% to reach $67,462.8, standing approximately $6,000 below the record high achieved earlier in March.
Bitcoin’s Price Supported by ETF Inflows and Anticipation of Halving
Despite experiencing a downturn from record highs in the past week, with a dip to as low as $60,000 as traders secured profits from recent gains, Bitcoin rebounded sharply from those lows. This recovery was driven by sustained capital flows into newly approved spot exchange-traded funds. However, continual outflows from the Grayscale Bitcoin Trust (GBTC) exerted some downward pressure on spot Bitcoin prices.
Furthermore, optimism surrounding the upcoming “halving” event contributed to the positive sentiment in the cryptocurrency market. The halving event, expected to occur around April with the generation of the 740,000th block, will reduce the rate of new Bitcoin issuance by 50%, effectively limiting Bitcoin’s supply. However, the exact timing of the event remains uncertain.
Despite these factors bolstering Bitcoin’s recovery, the extent of its price increase was constrained by the strength of the US dollar. The dollar surged to a one-month high on Monday amid dovish signals from major global central banks, as investors favored the dollar as a high-yielding, low-risk currency.
Furthermore, anticipation of upcoming signals on US interest rates from key economic data, particularly the personal consumption expenditures data (the Federal Reserve’s preferred inflation gauge) scheduled for release on Friday, also supported the dollar’s strength. Throughout the week, several Fed officials are expected to provide further insights into the central bank’s plans for interest rate adjustments in 2024, following last week’s Fed meeting, which indicated the possibility of 75 basis points worth of cuts this year.