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Bitcoin Surges 5% to One-Month Highs, Poised for Halving Event and ETF Momentum

London, February 09, 2024, The Europe Today: Bitcoin experienced a 5% surge on Friday, reaching one-month highs as a result of heightened buying activity ahead of the anticipated April halving event and a slowdown in outflows from exchange-traded funds (ETFs). The cryptocurrency reached a session peak of $47,705, marking its highest level since January, particularly fueled by the regulatory approval of the first U.S.-listed spot bitcoin exchange-traded products.

As of the latest reports, Bitcoin was trading 3.5% higher at $46,946, poised for a weekly gain of 10%, the most substantial in a week since October. Concurrently, Ethereum (Ether) saw a 2.5% increase, reaching $2,486.

Bitcoin had earlier hit a two-year high just above $49,000 in January, but subsequently experienced a downward trend, influenced by profit-taking in response to the Securities and Exchange Commission’s approval of ETFs, leading to a “sell the news” phenomenon.

This recent surge in Bitcoin’s price, however, diverged from the broader financial markets, where stocks, bonds, and gold saw rallies. While there was an initial expectation for global central banks to cut interest rates, policymakers have since pushed back against this notion, with economic data not supporting the view of imminent rate cuts. Despite this, risk assets such as stocks have continued to rise, with Bitcoin resuming its upward trajectory.

Analysts attribute Friday’s price surge to a combination of slowing ETF outflows and increased buying activity ahead of the impending halving event scheduled for April. The next halving, a process designed to slow the release of new bitcoins, is expected to take place in April. This event involves halving the reward for producing new tokens, with Bitcoin’s total supply capped at 21 million, of which 19 million have already been mined.

“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,” noted Joshua Mahony, Chief Markets Analyst at Scope Markets.

Historically, Bitcoin prices have demonstrated a tendency to rally following halving events. After the first halving in 2012, the price soared from $12 to $126 within six months. Similarly, after the second halving in 2016, it jumped to $1,000 from $654 within seven months, and in 2020, it surged to $18,040 from $8,570 in the same time period. Analysts suggest that if historical trends persist, traders may anticipate a robust performance in 2024 following the upcoming halving.