Bitcoin
rises above $62K as dollar weakens ahead of CPI data By Investing.com
Investing.com – The price rose slightly on Wednesday, driven by a modest positive movement as the dollar weakened, ahead of a key US consumer inflation report.
The world’s largest cryptocurrency rose 1% in the last 24 hours to $62,489.1 at 7:58 a.m. ET (11:58 a.m. GMT).
Bitcoin witnessed some relief from the falling dollar on Tuesday after Federal Reserve Chairman Jerome Powell said current monetary policy was sufficiently tight, indicating that interest rates will not increase further.
But Powell warned that the central bank had little confidence that inflation was returning to its 2% annual target.
This comes after producer price index (PPI) data was more positive than expected for April, potentially setting the stage for a strong consumer price index reading later on Wednesday.
Meanwhile, signs of decreasing capital flows into Bitcoin and cryptocurrency investment products, along with the threat of further regulatory action, have kept optimism regarding cryptocurrency markets limited.
Hong Kong Crypto ETFs See Abundant Outflows
Three Bitcoin spot and exchange-traded funds in Hong Kong recorded outsized outflows of nearly $40 million on Monday, wiping out two weeks of inflows since their April 30 debut.
While the immediate reason for the exits was unclear, they also came at a time when sentiment toward Hong Kong and Chinese markets had soured due to rising U.S. trade tariffs on Beijing and mixed economic signals from China.
The Hong Kong ETF outflows came amid dwindling capital inflows to their US counterparts as enthusiasm over approving spot Bitcoin ETFs for US markets faded.
While initial excitement over its approval drove Bitcoin to record highs of more than $73,000 in early March, the world’s largest cryptocurrency has traded largely within a trading range of $60,000 to $70,000 in recent months. last two months, amid few positive signs.
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The Bitcoin halving event occurred with little price action, while threats of further regulatory action by the US Securities and Exchange Commission also kept traders averse to the cryptocurrency markets.
Crypto Price Today: Altcoins in the Red Ahead of CPI Data
In addition to Bitcoin, broader cryptocurrency prices retreated as traders became more risk averse ahead of the US CPI data.
The world’s number 2 token Ethereum fell 0.25% while losing 1.6% and 1.1% respectively.
Gains in meme stocks – like GME and AMC – also inspired fleeting gains in meme tokens. fell more than 1.7% but remained almost stable.
Sticky US inflation will likely keep interest rates high for longer – a scenario that bodes ill for cryptocurrency markets, which generally thrive in low-rate, high-liquidity environments.
Reduction in Bitcoin fees could lead to sale of miners, says analyst
Bitcoin miners reduced their coin supply before the reward reduction took effect on April 19, a trend that could soon resume as blockchain becomes cheaper to use, reducing miner revenue.
“Average daily network fees increased after the halving, offsetting some problems for bitcoin miners. However, fees have since fallen as users’ initial rush to the Runes protocol has cooled,” Kaiko analysts said in a note.
“The recent decline in rates could lead to selling pressure from miners,” they added.
The price of Bitcoin already faces downward risks due to the payment of US$9 billion by the defunct cryptocurrency exchange Mt.Gox to its creditors and greater selling pressure from miners could worsen the situation.
Bitcoin miners generate revenue from two main sources – block rewards and transaction fees. They receive a fixed amount of BTC as a reward for adding new blocks to the blockchain, along with transaction fees for adding transactions to the blocks they mine.
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Last month’s halving reduced coin issuance per block from 6.25 BTC to 3.125 BTC, placing the burden of offsetting the negative impact on miner profitability on transaction fees and the price of bitcoin.