Bitcoin rallied late last week on the eToro platform to touch above $31,000 but couldn’t hold the level for more than a day as the market continues to tread carefully. The cryptoasset has been trading around $30,000 for just under a month as the market looks for more positive news to respond to, writes Simon Peters, cryptoasset market analyst at investment platform eToro.
The cryptoasset rallied with the rest of the market late last week on the back of a win for XRP in court, which sent many altcoins surging and saw its price catapult up 60%. But for bitcoin, the exuberance was short lived. Bitcoin was trading just below $30,000 on July 17.
Ether saw a similar late-week rally, rising above $2,000 for a very short time before pulling back to trade around $1,900, where it is this morning.
BlackRock bitcoin ETF application accepted
The BlackRock bitcoin ETF application, which has caused a major stir in markets in recent weeks, has been officially accepted onto the US regulator’s list for review.
Although still some way from officially approving it, this is a big step for the instrument as BlackRock has already had to refile its application once as the SEC rebuffed it for lacking details on surveillance sharing.
The ETF and other similar proposals made waves in crypto markets recently as investors cheered the introduction of major institutional developments for bitcoin. Much of the news will now be priced in, but an official acceptance of an ETF could still have profound effects on sentiment.
Bitcoin miners facing halving ‘stress test’
JPMorgan says the next halving of bitcoin will prove to be a major “stress test” for miners as the reward for block mining halves. The computer power required to produce tokens will effectively double leaving miners with less for their work.
According to analysts at the investment bank, miners will need to see energy costs come down and the price of bitcoin to increase significantly in order to make the process economically viable again. The next halving is currently pencilled in for April or May 2024 and as it gets closer the market could begin to move depending on the climate.
In theory, halving makes bitcoin more scarce as the amount of new coins coming into circulation decreases, which is generally supportive of the price. But if miners find the economics of the cryptoasset difficult to square this could lead to network congestion or other issues as validators drop out.
