The anticipated “halving” event in Bitcoin’s protocol has thus far failed to significantly impact its price, as industry experts suggest that the cryptocurrency’s trajectory remains intricately linked to broader market sentiment and geopolitical factors.
Bitcoin aficionados had awaited the “halving” eagerly—a scheduled adjustment to the cryptocurrency’s fundamental technology occurring around 0014 GMT on Saturday, designed to reduce the pace at which new bitcoins are generated.
This cyclical alteration, recurring every four years, had historically been associated by some with price surges in the aftermath, signaling optimism for another potential rally in Bitcoin’s value.
As of 1415 GMT on Monday, however, discernible effects were limited, with Bitcoin trading at $66,300. While it recorded a modest 1.2% gain last week and a 3.4% uptick on Monday, its trajectory has remained uncertain since reaching an all-time pinnacle of $73,794 the previous month.
Mick Roche, senior trader at Zodia Markets, the crypto arm of Standard Chartered, emphasized the prevailing influence of geopolitical dynamics over the halving’s impact, citing perceived de-escalation of tensions between Iran and Israel as a significant factor.
Global equities exhibited signs of recovery on Monday, reflecting a reversal of defensive positions assumed by investors amidst apprehensions of heightened Middle Eastern conflict.
Eric Demuth, CEO of Austrian cryptocurrency brokerage Bitpanda, underscored Bitcoin’s growing reliance on broader market sentiment, highlighting a lack of discernible patterns in retail trading activity surrounding the halving event.
“Crypto is so similar to stocks already. The same people that are trading stocks and tech stocks are also into crypto,” remarked Demuth.
Last year, excitement surrounding US regulatory approval for spot bitcoin exchange-traded funds (ETFs) buoyed Bitcoin’s recovery from a series of downturns in 2022.
Looking ahead, Ben Laidler, global markets strategist at eToro, identified the trend towards institutionalization as a focal point for Bitcoin. While currently dominated by retail investors, Laidler anticipates regulatory shifts facilitating broader institutional adoption, including corporations, banks, and central banks.
Despite their growing prominence, cryptocurrencies remain a specialized asset class, collectively valued at approximately $2.5 trillion, according to market tracker CoinGecko.
Regulators caution against their speculative nature, inherent risks, and limited real-world utility.
Attention within crypto markets is now trained on the possibility of the US Securities and Exchange Commission approving spot ETFs for Ethereum, the second-largest cryptocurrency. However, Eric Demuth and Mick Roche suggest that hopes for approval in May are dwindling.
