Anticipation of the upcoming halving event, which will reduce the pace at which new Bitcoin is generated, appeared to be offering some support to the token. But the build-up to the halving is also expected to spur increased volatility in Bitcoin.
Bitcoin rose 2.1% in the past 24 hours to $70,576.4 by 00:53 ET (04:53 GMT).
Markets were now awaiting the upcoming halving event, which is expected to take place around April 20 with the generation of block no. 840,000 on the Bitcoin blockchain.
The event will halve the rate at which new Bitcoin is mined, tying into the narrative that the scarcity of the token will increase its value.
But the halving also comes amid waning interest in spot-traded Bitcoin exchange traded funds, with recent data showing a substantial decline in daily volumes.
The Bitcoin ETFs were a key driver of the token’s rally so far in 2024, with Bitcoin still trading up around 50% for the year to date.
Broader cryptocurrency prices also advanced on Thursday, recovering from earlier losses despite the prospect of higher-for-longer U.S. interest rates.
World no.2 crypto Ethereum rose 1.3% to $3,565.0, while XRP and Solana added 1.7% and 1.5%, respectively.
Hotter-than-expected U.S. consumer price index data saw traders largely wipe out expectations that the Federal Reserve will begin cutting interest rates by June. The dollar also shot up to five-month highs after the reading.
The minutes of the Fed’s March meeting also showed officials growing increasingly concerned with sticky inflation and calling for higher-for-longer interest rates.
Such a scenario bodes poorly for crypto markets, given that they usually benefit from a low-rate, high-liquidity environment due to their speculative nature.
On the regulatory front, the U.S. Securities and Exchange Commission notified major decentralized exchange operator Uniswap Labs that it planned to carry out enforcement action against the firm.
Uniswap said it was notified by the SEC of the pending regulatory action, and that it was likely linked to the regulator’s stance on the classification of cryptocurrencies as securities. The exchange’s native token slid 16% after the announcement.
The SEC is currently engaged in lawsuits against Coinbase (NASDAQ:COIN) and XRP, both of which are expected to decide whether cryptocurrencies can be covered by traditional U.S. securities law.
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