News
Bitcoin Traders Ignore Halving to Focus on Broader Market Risks
By Elizabeth Howcroft
LONDON (Reuters) – Bitcoin’s halving has had little impact on its price so far, with industry insiders saying on Monday that the cryptocurrency’s fortunes were more tied to broader financial market sentiment and geopolitics.
Bitcoin enthusiasts have been eagerly awaiting the “halving” – a change in the cryptocurrency’s underlying technology that occurred around 00:14 GMT on Saturday and is designed to reduce the rate at which new bitcoins are created.
The change occurs every four years, and some cryptocurrency fans have pointed to price gains following previous halvings as a sign that bitcoin will rebound again.
As of 14:15 GMT on Monday, the impact was barely noticeable, with bitcoin trading at $66,300. It gained 1.2% last week and was up 3.4% on Monday, but has mostly struggled to find direction since hitting an all-time high of $73,794 last month.
“The geopolitical events that are happening right now are having a bigger impact than the halving, so it would be in line with the perceived easing of tensions between Iran and Israel,” said Mick Roche, senior trader at Zodia Markets, the crypto arm of Standard Chartered.
Global stocks recovered some of their losses on Monday as investors reversed some defensive positions they had taken on fears of a broader conflict in the Middle East.
Eric Demuth, CEO of Austrian cryptocurrency broker Bitpanda, said bitcoin was increasingly dependent on general market sentiment and there was no clear pattern of retail trading activity around the halving.
“Cryptocurrencies are already very similar to stocks. The same people who trade stocks and technology stocks are also interested in cryptocurrencies,” he said.
Excitement over U.S. regulatory approval of bitcoin cash exchange-traded funds (ETFs) helped bitcoin recover last year from a series of crashes in 2022.
For bitcoin, the focus now is on “institutionalization,” said Ben Laidler, global markets strategist at eToro.
Bitcoin is dominated by retail investors, Laidler said, but he expects regulatory changes in the future could make it easier for corporations, banks and central banks to hold Bitcoin.
Cryptocurrencies remain a niche asset class, with their combined value at around $2.5 trillion, according to market tracker CoinGecko.
Regulators warn that they are speculative, risky and have limited real-world uses.
Cryptocurrency markets are also waiting to see whether the U.S. Securities and Exchange Commission will approve spot ETFs for the second-largest cryptocurrency, ether, but Demuth and Roche said hopes that could happen in May were fading.
(Reporting by Elizabeth Howcroft; Editing by Tommy Reggiori Wilkes and Mark Potter)