Bitcoin surges in biggest weekly rally in four months

Rises 5% to one-month high on increased buying ahead of April’s halving

LONDON:

Bitcoin rose 5% on Friday to one-month highs, powered by what analysts said was a flurry of buying ahead of April’s halving event and as recent outflows from exchange-traded funds slowed.

The price rose to a session peak of $47,705, the most since January, after the first US listed spot bitcoin exchange traded products received regulatory approval. The world’s largest cryptocurrency was last up 3.5% at $46,946, set for a rise of 10% this week, its most in a week since October. Ether was up 2.5% at $2,486.

Bitcoin hit a two-year high just above $49,000 in January, but has since trended lower, under pressure from a “sell the news” wave of profit-taking after the Securities and Exchange Commission finally approved the ETFs.

Read Bitcoin falls to $40,000, lowest level since bitcoin ETF launch

The drop in bitcoin went against the grain of other financial markets in recent weeks, as stocks, bonds and gold all rallied on the back of an expectation for global central banks to switch to cutting interest rates this spring.

Policymakers have since pushed back against this and economic data has not supported the view that rates should fall any time soon, but risk assets like stocks have risen, with bitcoin resuming its march higher. Friday’s jump in price was said to be a function of a slowing in recent ETF outflows and a burst of buying ahead of April’s halving, analysts said. “With bitcoin back up to $46,000 this morning, traders are clearly gearing up for the hotly anticipated halving event due in roughly two months,” Scope Markets’ chief markets analyst Joshua Mahony said.

The next halving is expected in April, a process designed to slow the release of bitcoin, whose supply is capped at 21 million – of which 19 million have already been mined – by cutting the reward for producing the tokens in half.

Published in The Express Tribune, February 10^th, 2024.

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