Bitcoin price is on the rise again following the release of the US Consumer Price Index (CPI) data, which revealed a slight decrease in inflation. This has led to a decrease in selling pressure for Bitcoin. Experts in the crypto market are also exploring the impact of the general market trend and the upcoming Bitcoin halving on miners.
The CPI data, provided by the United States Bureau of Labor Statistics (BLS), showed that inflation increased by only 0.3% in April, slightly lower than expected. The CPI measures the average change in customer pricing for goods and services over time, making it an important indicator of inflationary pressures. In response to this data, Bitcoin experienced a sudden 7% spike in its price, reaching $65,152. The S&P 500 index also reached new all-time highs, surpassing the 5,300 mark. These positive reactions indicate the confidence of both traditional finance and the crypto market in Bitcoin.
In addition to the CPI data, analysts are examining how the upcoming 2024 halving event will affect Bitcoin mining. The halving event reduces miners’ incentives by 50%, but based on historical patterns, Bitcoin miner revenue tends to recover within 2-5 months after a halving. Plan B, a well-known Bitcoin analyst, has pointed out this pattern and predicts that after a consolidation phase, Bitcoin’s price will soar.
Another Bitcoin analyst, Willy Woo, believes that inefficient miners are eliminated from the ecosystem during the halving. These miners tend to sell their Bitcoin before exiting the market. On the other hand, strong miners with higher profit margins are expected to survive without the need to sell their Bitcoin, thus reducing the overall sell pressure from miners.
However, Woo also suggests that it will take some time for the supply and demand dynamics to fully reflect in Bitcoin’s price. He estimates that it may take 2-5 months for the market to adjust to the new supply/demand balance. Tom Lee, a well-known analyst from Fundstrat, shares this optimism and believes that Bitcoin miners have the power to drive up the price of the cryptocurrency.
As of now, Bitcoin is trading at $66,252, showing a 6.7% increase in the past 24 hours. The trading volume has also surged by 77.8% to $42.8 billion, indicating renewed interest from investors.
While Bitcoin mining is experiencing advancements, such as the development of a 3nm mining chip by Block Inc., challenges also arise. US President Joe Biden has proposed a 30% excise tax on electricity used by miners, which has received criticism from the crypto community as it could hinder Bitcoin mining in the US.
In conclusion, the rebound in Bitcoin price after the CPI data and the exploration of the impact of the halving event on miners indicate positive trends in the crypto market. Despite challenges such as proposed taxes on miners, the advancements in mining technology show the commitment to improving efficiency and decentralization in Bitcoin mining.