Bitcoin has surged to a one-month high, hovering around the $46,000 mark, propelled by steady inflows into various US funds for the cryptocurrency and heightened interest in the upcoming halving event expected in April. The largest digital asset climbed approximately 2% to reach $46,166 as of 11:06 a.m. in Singapore on Friday, extending its 2024 rally by roughly 9%. Additionally, smaller tokens like Ether, Solana, and Cardano experienced upward momentum.
The launch of nine US spot Bitcoin exchange-traded funds on January 11, alongside the conversion of the more than decade-old Grayscale Bitcoin Trust into an ETF on the same day, has significantly broadened the accessibility of Bitcoin investments. These new funds have collectively attracted a net inflow of $8 billion so far, while the previously dominant Grayscale fund, which witnessed a $6 billion outflow following its conversion, is now showing signs of stabilizing.
“Bitcoin appears poised to continue its upward trajectory now that the Grayscale outflows have subsided,” noted Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets. Mauron further emphasized the growing momentum of the “halving narrative,” predicting that Bitcoin could surpass $50,000 in the coming weeks.
The quadrennial halving event, which reduces the reward for Bitcoin miners from 6.25 coins to 3.125 coins per block, plays a pivotal role in limiting the total supply of Bitcoin to 21 million tokens. Past halving events have historically preceded significant bull runs, as highlighted by a team including DBS Bank Ltd. Chief Economist Taimur Baig. The team explained that the reduction in mining rewards inevitably drives up the price of Bitcoin to maintain profitability for miners, thereby fueling further market momentum.
Despite its recent surge, Bitcoin still lags approximately $23,000 below its all-time high reached during the 2021 bull run, which was characterized by pandemic-era economic conditions and abundant liquidity in financial markets.
