Bitcoin, the world’s largest cryptocurrency, staged a recovery on Monday, reclaiming some of the losses incurred last week. The resurgence was fueled by sustained capital inflows into exchange-traded funds (ETFs) and anticipation surrounding the upcoming “halving” event.
As of 01:46 ET (05:46 GMT), Bitcoin surged by 4.9% to reach $67,462.8, although it remained approximately $6000 below the record high achieved earlier in March.
The recent dip in Bitcoin’s price followed a period of record highs, with the cryptocurrency plummeting to as low as $60,000 as traders capitalized on profits. However, the market quickly rebounded from these lows, bolstered by continued capital inflows into recently-approved spot ETFs. Nonetheless, sustained outflows from Grayscale Bitcoin Trust (GBTC) exerted some pressure on Bitcoin’s spot prices.
Moreover, investor sentiment was uplifted by anticipation surrounding the impending “halving” event, where the Bitcoin network’s production of new tokens will be halved. Expected to occur around April with the generation of the 740,000th block, the halving event is anticipated to further constrain Bitcoin supply. However, uncertainty persists regarding the exact timing of the event.
Despite the positive momentum, Bitcoin’s recovery was capped by the strength of the US dollar. The dollar surged to a one-month high, buoyed by dovish signals from major central banks globally, which prompted investors to favor the dollar as a high-yielding, low-risk currency.
Further support for the dollar stemmed from anticipation surrounding upcoming signals on US interest rates, particularly from key personal consumption expenditures data due later in the week. Investors eagerly awaited insights from a string of Federal Reserve officials scheduled to speak throughout the week, seeking clarity on the central bank’s plans for interest rate adjustments in 2024. Last week’s Fed meeting indicated the possibility of 75 basis points worth of rate cuts this year.
