The cryptocurrency market has recently experienced a noticeable cooling. The price of Bitcoin, the flagship of virtual currencies, is approaching the $40,000 mark. This decline occurred shortly after the U.S. Securities and Exchange Commission (SEC) decision to approve a Bitcoin-based Exchange-Traded Fund (ETF). This situation paints a new picture of the market, where investors’ hopes and reality are beginning to diverge.
Over the past week, we have observed the cryptocurrency market slowly losing its earlier momentum. The current market capitalization has decreased to $1.69 trillion, which is a noticeable drop. This turn of events takes place a week after the historic step – SEC’s acceptance of the Bitcoin ETF, which was a hot topic in recent months.
Contrary to expectations, the introduction of the ETF did not bring a sudden influx of investment. The total assets of ETFs focused on Bitcoin amount to about $26 billion, of which a dominant part belongs to Grayscale, holding 581,274 BTC. Meanwhile, the SEC has postponed the decision on Fidelity’s proposal for an Ethereum ETF, leading to a drop in the price of this asset. Ethereum, the second largest cryptocurrency, is currently priced at around $2,450, representing a 7.7% decrease over the week.
Generally, a downward trend is seen in the market: Bitcoin lost 8.4%, and other popular currencies such as SOL, XRP, ADA, AVAX have also recorded significant declines. However, it is worth noting Binance Coin (BNB), which alone recorded a growth of 1.3% during this period.
Particularly severe declines affected Ethereum-related tokens, such as Layer 2 scaling solutions – Optimism and Arbitrum, with value decreases exceeding 20% in the past seven days.
Despite these changes, the overall mood in the cryptocurrency market seems to be set for consolidation. Market participants are adopting a wait-and-see attitude, which may be a signal for further investment strategies.
In the context of the upcoming event, such as Bitcoin’s halving, scheduled for the end of April, the market may still surprise. Halving is a process that reduces the rewards for mining Bitcoin, which historically has led to an increase in its value. Whether the current cooling is the calm before the storm, or it heralds a longer period of stagnation – the coming months will be crucial for understanding the future of the cryptocurrency market.
