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Investing.com – Prices rose slightly on Friday, approaching record highs, as hotter-than-expected U.S. inflation data positioned the world's most popular cryptocurrency as a potential hedge against the fading purchasing power of traditional currencies.
The anticipation of the upcoming halving event, which will reduce the speed at which new Bitcoin is generated, also appears to provide some support for the token.
At 03:00 ET (07:00 GMT), Bitcoin was up 0.3% at $70,965, not far from the record high of $73,750 reached last month.
Bitcoin Halving to Have “Sweeping Impacts”
The halving event is the most important upcoming event in the industry, with the generation of block #840,000 on the Bitcoin blockchain expected to take place next week.
The event will halve the rate at which new Bitcoin is mined and ties into the narrative that the token's scarcity will increase its value.
Analysts at JPMorgan said in a note this week that the halving could have a “broad impact” on the Bitcoin mining industry.
“All else being equal, the halving will cut industry revenue in half, triggering a wave of consolidations and business closures while (hopefully) streamlining network hashrate and industry investment, ultimately good for the remaining operators,” explained JPMorgan.
The investment bank estimates that industry-wide gross profit, currently at about $2.5 billion per quarter, will decline by 30% to 40%, with network hashrate falling by as much as 80 EH/s (or 13.5%) at the bottom %) will decrease.
Crypto price today: mixed trading after US inflation data
Broader cryptocurrency prices were more mixed on Friday as investors digested the latest US inflation data.
The world's second-largest cryptocurrency fell 1.4% to $3,536.1, also fell 0.2% and rose 1%.
The confusing US inflation picture has led traders to pick their favorites in the crypto universe, with the country performing weaker than expected, in direct contrast to the hotter than expected surge earlier in the week.
While a potential delay in the Federal Reserve's rate cut would not be beneficial for the crypto market, which typically benefits from a low interest rate environment with high liquidity due to its speculative nature, a rise in inflation could lead to a search for Bitcoins as a hedge against one weakening dollar.
Due to its limited supply and independence from the monetary policies of various governments, Bitcoin is considered a “safe haven” similar to gold.
Binance is leading the way with increasing trading volumes
Fueled by the ongoing bull market, major centralized crypto exchanges recorded astonishing growth in spot trading volumes last month.
According to a recent report, spot trading volume increased an average of 134% to $2.48 trillion in March compared to February figures. Meanwhile, the derivatives market volume registered a 47% increase month-on-month.
The most popular trading platform, Binance, led the way in terms of volume, recording nearly $1.15 trillion in volume in March, more than doubling the $479.95 billion recorded in February.
The $1.15 trillion volume recorded by Binance is more than seven times the value recorded by Coinbase (NASDAQ:).
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