Bitcoin
Bitcoin traders ignore ‘halving’ to focus on broader market risks
LONDON (Reuters) – Bitcoin’s so-called halving event has had little impact on its price so far, with industry experts saying on Monday that the cryptocurrency’s fortunes were more closely tied to broader financial market sentiment and the geopolitics.
Bitcoin enthusiasts eagerly awaited the “halving” – a change in the cryptocurrency’s underlying technology that took place at around 00:14 GMT on Saturday and was designed to reduce the rate of creation of new bitcoins.
The change occurs every four years and some crypto fans have pointed to price gains following previous halvings as a sign that bitcoin would rise again.
At 14:15 GMT on Monday, there was little noticeable impact, with bitcoin trading at $66,300. It gained 1.2% last week and rose 3.4% on Monday, but has mostly struggled to get its bearings since hitting an all-time high of $73,794 last month.
“The geopolitical events unfolding right now are having a greater impact than any impact from the halving. So that would be the perceived easing of tensions between Iran and Israel,” said Mick Roche, senior trader at Standard Chartered’s crypto arm Zodia Markets. .
World stock markets recovered some losses on Monday, as investors reversed some defensive positions they had taken due to fears of a wider conflict in the Middle East.
Eric Demuth, CEO of Austrian cryptocurrency exchange Bitpanda, said bitcoin is increasingly dependent on broader market sentiment and that there is no clear pattern of retail trading activity around the halving.
“Crypto is already very similar to stocks. The same people who trade stocks and tech stocks also like crypto,” he said.
Excitement surrounding US regulatory approval for spot bitcoin exchange-traded funds (ETFs) helped bitcoin recover last year from a series of declines in 2022.
For bitcoin, the focus is now on “institutionalization,” said Ben Laidler, global markets strategist at eToro.
Bitcoin is dominated by retail investors, Laidler said, but he hopes regulatory changes in the future could make it easier for companies, banks and central banks to own Bitcoin.
Cryptocurrencies remain a niche asset class, with their combined value around $2.5 trillion, according to market tracker CoinGecko.
Regulators warn that they are speculative, risky and have limited real-world uses.
Crypto markets are also waiting to see whether the US Securities and Exchange Commission will approve spot ETFs for the second-largest cryptocurrency, ether, but Demuth and Roche said hopes that this could happen in May were fading.
(Reporting by Elizabeth Howcroft; Editing by Tommy Reggiori Wilkes and Mark Potter)