.Bitcoin rose above $46,000 at a one-month high, supported by signs of steady inflows into the token as well as growing interest in the so-called halving event due in April.
. The largest digital asset rose about 4% to $46,450 in the past 24 hours, bringing its 2024 rise to about 10%. Smaller tokens such as Ethereum, Solana, and Cardano also rose.
. Nine spot bitcoin exchange-traded funds debuted on January 11, while the more than decade-old Grayscale Bitcoin Trust was converted into an ETF on the same day. These funds expanded the investor base in the famous digital currency. The new funds have attracted a net $8 billion so far, while the $6 billion outflow from the Grayscale fund since its conversion is now running out of steam.
. “Bitcoin appears poised to resume its bull run now that outflows have finally tapered off,” said Caroline Morrone, co-founder of digital asset derivatives liquidity provider Orbit Markets. She added that the “halving event” will gain momentum, and the price of Bitcoin will likely exceed $50,000 in the next few weeks.
. Halving is the systematic, algorithmic reduction in Bitcoin's block reward, meaning that the rewards miners receive for validating blocks are reduced by 50% every 210,000 blocks using specialized, energy-intensive computers.
. The next halving, scheduled for April 2024, will reduce miners’ profits to 3,125 bitcoins per block (about $94,000), compared to the current 6.25 bitcoins, or approximately $189,000.
. A team led by chief economist Timur Beg of DBS Bank Ltd wrote in a note that previous halving events were followed by a “strong rally.” “As the mining reward decreases, the price of mining production (i.e. Bitcoin) should rise to compensate and not cause a drain on computational resources by miners,” the team added.
. Bitcoin remains about $23,000 below the record high the cryptocurrency hit in 2021, during a pandemic-era bull run fueled by easy money.
