Bitcoin (BTC) has fallen more than 3% from its 24-hour high as investors in the Grayscale Spot Bitcoin Exchange Traded Fund (ETF) released $598.9 million from the fund on February 29th. This is the second largest net outflow on record.
According to Cointelegraph Markets Pro, Bitcoin hit a 24-hour high of $63,585 in the early morning hours of February 29, and has since fallen about 3.3% to just under $61,500.
This comes as the Grayscale Bitcoin Trust (GBTC), which the asset manager recently converted into an ETF, reached $600 million in daily net outflows on February 29, according to preliminary Far Side Investors. This is in response to what happened. data.
This only exceeds the ETF’s previous record of net outflows of $640.5 million on January 22nd.
“That’s too much,” Eric Balciunas, senior ETF analyst at Bloomberg, commented on the day’s outflows in an X post on February 29th.
The near-record outflows come just days after GBTC hit a historic low of $22.4 million in daily net outflows on February 26th.
“Two steps forward, one step back,” Balciunas added.
On Wednesday, February 28, Bitcoin hit its highest level in more than two years at $64,000, and the 10 U.S. Spot Bitcoin ETFs collectively recorded record net inflows of $673.4 million.
The latest GBTC outflow may reduce inflows for the day. Complete inflow data across the other nine ETFs is not currently available, but Pharside’s Feb. 29 data shows that Fidelity’s Bitcoin ETF, one of the top three largest funds by assets, It already showed that it was the fourth-lowest day for inflows, with net inflows of just $44.8 million. .
Meanwhile, analysts at JPMorgan warned in a recent note to investors that Bitcoin’s price could fall after the “halving euphoria” wears off.
Many believe that Bitcoin’s upcoming halving event in April could push the price higher, but analysts say it could have the opposite effect and push the price closer to $42,000. pointed out in a February 29 memo. saw By Bloomberg.
Related: Bitcoin ETFs set for “even bigger waves” in coming months: Bitwise
The Bitcoin halving event is a historic catalyst for the rise in Bitcoin prices as it reduces the Bitcoin block reward from 6.25 BTC to 3.125 BTC and typically increases production costs for miners thereafter.
Analysts say the cost of production, or the cost to mine one Bitcoin, would theoretically be the minimum price for Bitcoin, and would “mechanically double” to 5.5% after the halving. It’s expected to cost $3,000.
However, the mining difficulty could be 20% lower than originally estimated, pushing down production costs and the price of Bitcoin, which could cause the cryptocurrency to drop to $42,000 after the April halving. Analysts pointed out that there is.
Analysts expect mining difficulty to drop by another 20%, assuming some miners with less efficient machines and little money to upgrade will take their rigs offline as running costs rise. Then I did the calculation.
This would reduce Bitcoin’s hashrate and mining difficulty by an estimated 20%, which is in line with estimates made by Galaxy Digital last month.
Analysts say a reduction in mining difficulty may not occur as inefficient mining rigs may continue to be profitable, especially in a scenario where Bitcoin prices continue to rise due to demand from Bitcoin ETFs. admitted that.
Big question: How can Bitcoin payments make a comeback?
