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Investing.com – With the halving imminent, a report from Citi Research suggests the impact on Bitcoin price may be less noticeable than in previous cycles. The report also delves into various aspects of the cryptocurrency market as the Bitcoin halving, scheduled for April 20, approaches.
Bitcoin halving, an event that reduces the reward for mining new blocks by half, is a mechanism to control Bitcoin supply and has been associated with price increases in the past. However, Citi Research points out that unlike Bitcoin, Bitcoin has not shown consistent performance post-halving. With the reward dropping from 6.25 BTC to 3.125 BTC per block this year, the market may not see as big price jumps as it once did.
According to Citi Research, one of the main drivers of Bitcoin price has been inflows into spot Bitcoin ETFs. The report notes that as of April 12, there were $12.6 billion in net inflows into these novel vehicles, which play a role in the weekly price increases. Despite these inflows, the broader cryptocurrency market is showing signs of lower engagement, which is reflected in trading volumes and open interest metrics.
The study also reveals a contrasting scenario in network activity between Bitcoin and Ethereum. The latter's network activity has seen an uptrend that is not reflected in Bitcoin, where activity remains relatively subdued.
When it comes to economic influence, the report notes that macroeconomic factors that previously coincided with cryptocurrency movements are now less correlated. This decoupling suggests that investors may need to adjust their strategies when considering cryptocurrency investments.
Additionally, public interest as measured by search trends has not yet peaked, indicating muted anticipation for the upcoming halving compared to previous events. This lack of increased public interest could lead to less dramatic market moves post-halving.
Citi Research concludes that while the Bitcoin halving remains a significant event, its impact on Bitcoin price and market dynamics may be less pronounced this year.
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