🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Bitcoin price today: halving event looms large

Published 04/12/2024, 03:06 PM
© Reuters

Investing.com-- Bitcoin price edged higher Friday, pushing close to record highs as hotter-than-expected U.S. inflation data positioned the world’s most popular cryptocurrency as a potential hedge against the diminishing purchasing power of traditional currencies.

Anticipation of the upcoming halving event, which will reduce the pace at which new Bitcoin is generated, also appears to be offering some support to the token. 

At 03:00 ET (07:00 GMT), Bitcoin rose 0.3% to $70,965, not far removed from the $73,750 record high reached last month. 

Bitcoin halving to have “sweeping implications”

The halving event is the main upcoming event in the sector, with the generation of block no. 840,000 on the Bitcoin blockchain widely expected to take place next week.

The event will halve the rate at which new Bitcoin is mined, tying into the narrative that the scarcity of the token will increase its value.

Analysts at JPMorgan said in a note this week that the halving event could have “sweeping implications” for the Bitcoin mining industry.

“All else equal, the halving will cut industry revenues in half, triggering a wave of consolidation and business closures, while (hopefully) rationalizing the network hashrate and industry capex, which is ultimately good for the remaining operators,” stated JPMorgan.

The investment bank estimates that industry-wide gross profits, currently about $2.5 billion per quarter, will decline 30% to 40%, with the network hashrate declining as much as 80 EH/s (or 13%) peak to trough.

Crypto price today: mixed trading after U.S. inflation data

Broader cryptocurrency prices have traded in a more mixed fashion Friday, as investors digested the latest U.S. inflation data. 

World no.2 crypto Ethereum fell 1.4% to $3,536.1, Solana also dropped 0.2%, while XRP rose 1%.

The confusing U.S. inflation picture has resulted in traders picking favorites in the crypto universe, with the country’s producer price index coming in weaker than expected, in direct contrast to the hotter-than-expected consumer price index earlier in the week.

While the Federal Reserve potentially delaying cutting interest rates would not be beneficial to the crypto market, given that they usually benefit from a low-rate, high-liquidity environment due to their speculative nature, a surge in inflation could see the likes of Bitcoin sought after as a hedge against a weakening dollar.

Bitcoin has been considered a "safe haven" asset, much like gold, due to its finite supply and independence from the monetary policies of various governments. 

Binance leads way with trading volume gains 

The major centralized crypto exchanges have witnessed staggering growth in spot trading volume over the past month, fueled by the ongoing bull market.

A recently published report indicated that spot trading volume for March saw an average 134% increase over the figures for February, to $2.48 trillion. Meanwhile, the derivatives market volume witnessed a 47% gain month-over-month.

The most prominent trading platform, Binance, led the charge in terms of volume - recording a volume of almost $1.15 trillion in March, more than doubling the $479.95 billion recorded in February.

The $1.15 trillion volume Binance recorded is more than seven times the figure Coinbase (NASDAQ:COIN) witnessed.


Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.