Bitcoin has dropped to its lowest level in over a month, as inflows from spot bitcoin exchange-traded funds (ETFs) slow.
Bitcoin Price Falls Below $62,000 Amid Slowed ETF Inflows Before Halving
The world's greatest digital currency by market capitalization (BTC-USD) fell below $62,000 (£49,709) in the last 24 hours, dropping by more than 3%. The drop caused the digital asset to fall to a monthly low of $60,181 on Wednesday evening UK time, an unprecedented level, since mid-March.
The drop follows a decrease of inflows into spot bitcoin ETFs from fund managers such as Franklin Templeton (BEN) and precedes Saturday's bitcoin halving event.
Trading volumes for spot bitcoin ETFs have fallen since their high in early March. Many ETF issuers have reported nil flows since earlier this week.
On Tuesday, spot ETF net outflows totaled $58 million. This was accelerated by outflows of $79.4 million and $12.9 million from the Grayscale Bitcoin Trust (GBTC) and the ARK 21Shares Bitcoin ETF (ARKB), respectively.
Nevertheless, IBIT, BlackRock's (BLK) iShares Bitcoin Trust ETF, keeps on showing daily positive flows, with $25.8 million inflows recorded on Tuesday.
Wider Cryptocurrency Downturn
Bitcoin is not the only digital currency that has plummeted in the last day. Solana (SOL-USD) has experienced the most significant price drop among the crypto heavyweights, falling by more than 8% in the last 24 hours to $129, based on Coingecko data.
The worldwide cryptocurrency market cap is currently $2.33 trillion, a 3.8% fall in the last 24 hours. Bitcoin's dominance is 51.6%, whereas Ethereum's dominance is 15.3%. According to Coingecko's data.
The cryptocurrency market dip comes ahead of the approaching bitcoin halving, which might serve as a significant price driver for the sector.
Bitcoin Halving Approaches: Analysts Predict Increased Investment Amid Rewards Cut
Analysts agree that the approaching 'bitcoin halving' could fuel further investment into the bitcoin market. This event is expected to take place on or around Saturday, April 20.
The bitcoin halving occurs approximately every four years. The halving will cut miners' rewards for validating blocks on the blockchain from 6.25 BTC to 3.125 BTC.
This might cause a supply crisis for the digital asset, potentially leading to a price increase.
However, as reported by Yahoo Finance's Bradley Smith, the halving will not benefit bitcoin miners.
"For companies like Marathon and Riot— the rewards that they generate will diminish. If you look out more broadly over the year-to-date performance— all of these companies are down, and down bad," Smith stated.
He further stated that the halving will put even more strain on bitcoin miners' operating costs. "So that thrusts them very much into the conversation of whether or not they could be a target for an acquisition," he further explained.