In the run-up to the bitcoin halving event, bitcoin prices regained $70,000 on Thursday in the international crypto markets. The most popular crypto token traded around $70,600, rising 4.5 per cent in the past 24 hours.
Meanwhile, ethereum rose 3.4 per cent to trade at $3,552, Binance Coin rose 4.5 per cent to trade at $604, Solana spiked 6.26 per cent to trade at $174 and Dogecoin spiked 6.76 per cent to trade at $0.195, according to the CoinDesk data.
At the same time, Grayscale’s bitcoin (BTC) exchange-traded fund (ETF) shows nearly $18 million outflows on Wednesday, a record low since going live in January.
It is expected that bitcoin’s halving event, expected later this month, will raise the prices of other tokens of the bitcoin ecosystem.
What is bitcoin halving?
For the uninitiated, halving lowers the rate at which new bitcoin coins are minted, and therefore brings the new supply down.
As of now, the existing block reward is 6.25 BTC, which will drop to 3.125 BTC once the halving takes place.
The most recent halving took place on May 11, 2020, resulting in a 12 per cent increase in prices during the subsequent week. This month marks the fourth occurrence of such an event since 2012.
Profit booking ahead?
However, some crypto experts have cautioned the investors against being too bullish on the halving event as it could create selling pressure in the days before and after the event, due on April 20.
ALSO READ: Bitcoin gained 150% in FY24, to remain in positive trajectory in FY25: Experts
Arthur Hayes, former CEO of crypto exchange BitMEX said in a blog post that when most market participants agree on a certain outcome, the opposite usually happens.
“The Bitcoin block reward is forecast to halve on April 20th. This is seen as a bullish catalyst for crypto markets. I agree that it will pump prices in the medium term; however, the price action directly before and after could be negative. The narrative of the halving being positive for crypto prices is well entrenched,” he wrote in his post on Heatwave.
Shivam Thakral, CEO of BuyUcoin, also believes that investors could resort to profit-booking ahead of halving.
“The upcoming halving in less than 10 days will reduce block rewards from 6.25 Bitcoin to 3.125 Bitcoin. This price action is a result of long-term investors booking profits ahead of the forthcoming halving. For instance, Grayscale (GBTC) had a net outflow of over 2,990 BTC,” says Thakral.
“Traders should be careful about both bull and bear scenarios, as there is a good chance that some profit booking will take place at the time of halving as well,” CoinSwitch Markets Desk wrote in a statement.
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Published: 11 Apr 2024, 08:22 PM IST