Benzinga - Analysts, led by Michael Graham, at Canaccord Genuity, suggested that the upcoming halving in April could further boost the ETF tailwinds for Bitcoin. The halving, which occurs every four years, involves a 50% reduction in miner rewards, thereby decreasing the supply of Bitcoin.
What Happened: According to a report by brokerage firm Canaccord Genuity, the recent surge in Bitcoin (CRYPTO: BTC) prices was driven by the approval of spot exchange-traded funds (ETFs), the upcoming reward halving, and a growing risk appetite in financial markets, reported CoinDesk on Thursday.
The first quarter of 2024 saw Bitcoin’s value skyrocket by over 60%.
The report also noted that publicly traded miners underperformed Bitcoin in the first quarter, indicating a decoupling from the cryptocurrency’s price.
Canaccord Genuity also pointed out that the SEC’s approval of 11 U.S. spot Bitcoin ETFs in the quarter is encouraging. They anticipate that this tailwind will persist as retail investors seek to add crypto exposure to their tax-advantaged accounts. The report also suggested that spot ETFs could become a more significant part of Bitcoin’s price action in the future.
See Also: Trader Turns $3K Into $215K In Hours With Freshly Launched Dawkoin As ‘Father Of MEMEs’-Based Crypto’s Market Cap Skyrockets To $15M
Why It Matters: The impending reward halving and its potential impact on Bitcoin’s value have been a topic of interest. The fourth Bitcoin halving, expected in mid-April 2024, is anticipated to cause increased volatility in the cryptocurrency market. Historical data suggests that halving events typically trigger a surge in Bitcoin’s value due to a supply shock that tightens its availability.
However, a report from Glassnode added that the narrative around the halving may be changing. The influx of institutional demand through Bitcoin ETFs is significantly altering the supply-demand equilibrium, potentially diminishing the traditional impact of the halving.
Read Next: Bitcoin, Ethereum, Dogecoin Register Little Change Amid Bullish Momentum: Analyst Says $160K Could Be A ‘Conservative’ Price Target For King Crypto
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