The Reasons Why Cryptos Lost a Ton of Money This Week

Strong net inflows into bitcoin ETFs, new spot Ether ETF registration filings, and an expected "bitcoin halving" event in early April boosted several major cryptocurrencies this week. Bitcoin (CRYPTO: BTC) rose 9.7% and Ethereum (CRYPTO: ETH) rose 5.1% as of Friday's regular session. Memecoins Dogecoin (CRYPTO: DOGE) and Shiba Inu (CRYPTO: SHIB) rose 41.2% and 16.5% this week.

Crypto:BTC company card New spot Bitcoin ETF inflows ETF ETH filings Bitcoin reached $71,000 numerous times this week after dipping below $63,000, before stabilizing at $69,500. Bitcoin ETF net inflows exceeded $243.4 million on Thursday, boosting the world's largest cryptocurrency.

The ARK 21 Shares Bitcoin ETF (NYSEMKT: ARKB) became the third bitcoin ETF to reach $200 million in net inflows since the SEC approved the first 13 bitcoin ETFs in January on Wednesday. Bitcoin has had an incredible rally since October 2023, after months of speculation after the SEC declined to appeal a federal court's August ruling preventing Grayscale Investments from converting its popular Grayscale Bitcoin Trust into an ETF.

ETFs can be bought and sold through most online brokerages during the trading day, unlike crypto-specific firms that need investors to open crypto trading accounts. Anyone wanting to invest in cryptocurrency can use ETFs more easily. SEC approvals are a rare official endorsement of cryptocurrencies as investments.

Recently, investors have hypothesized that Etherium ETF approvals may be coming in the coming months, expanding ordinary traders' crypto investment possibilities. Wednesday saw Fidelity Investments file a Form S-1 Registration statement for its spot ETH ETF. Bitwise, an asset manager, filed a similar spot Ether ETF registration statement on Thursday.

On bitcoin halving Crypto investors are eagerly awaiting a bitcoin halving event in mid-April, the fourth such event in bitcoin's history after 2012, 2016, and 2020. This event cuts bitcoin miners' reward for solving complex transactions in half to limit new bitcoins until 21 million have been issued. Bitcoin's price has soared after each of the past three halving occasions, so investors expect a similar increase next month.

The halving event is comparable to a stock split, where a corporation lowers its per-share price but increases its share count. Naturally, splits are zero-sum if the underlying business remains the same. However, many ordinary investors prefer the lower post-split stock price. Multiple cryptocurrency industry pundits believe this halving occurrence will boost bitcoin adoption and limit supply, keeping its price high.

The halving reminds people that bitcoin supply is truly limited and demand is increasing, driving up bitcoin prices in the long term," Azteco Chief Marketing Officer David Bailey stated this week. "As something becomes more valuable, more people will want to use it, and so the cycle continues." No one can guarantee that bitcoin will rise after this halving. It's not unexpected that crypto traders are optimistic before the event.

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