Bitcoin drops below $60k on news of Israel-Iran conflict
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As the Bitcoin halving approaches, the risk of another “sell-the-news” market move looms, with analysts from JPMorgan and Deutsche Bank suggesting that the event is mostly priced in already. Bitcoin has a history of rallying ahead of much-touted industry milestones, only to experience volatile price swings and letdowns in the aftermath.
The Middle-East conflict has overshadowed the halving in recent days, and if any volatile price swings occur, it could be due to the “sell-the-news” cycle.
On the tech side, the introduction of Runes, a new protocol for creating fungible tokens using Bitcoin’s infrastructure, could potentially solve the blockchain’s long-term security issues. According to IntoTheBlock’s, Runes and Ordinals are likely to contribute to Bitcoin’s security budget and make the network more sustainable as inflationary rewards decline.
With miners’ BTC holdings at a 12-year low, the integration of Runes could provide a much-needed boost to the network’s economic model by amplifying fee generation and redirecting speculative activities to the Bitcoin network.
Today’s Newsletter
- Bitcoin drops below $60,000 on news of Israel’s missile strike on Iran
- Bitcoin risks another ‘sell-the-news’ market move after halving
- Runes could solve Bitcoin’s long-term security: IntoTheBlock
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MARKETS
Bitcoin drops below $60,000 on news of Israel’s missile strike on Iran
Bitcoin’s price has dropped below $60,000, hitting a low of around $59,600 on Binance, following news of Israel’s missile strikes against Iran early Friday morning (UTC). The market reacted quickly to the escalating geopolitical tensions between the two countries, with Israel’s action being a response to Iran’s attack last Saturday, which involved over 300 drones and missiles.
According to Israeli military officials, nearly all of these were intercepted by Israel and its allies, including the US.
The sudden drop in Bitcoin’s value has been accompanied by similar declines in altcoins, with Ethereum currently trading near $3,000, a 2% decline in the last 24 hours, and other major cryptocurrencies experiencing drops ranging from 1-3%.
Bitcoin analyst Tuur Demeester commented on the situation, stating that geopolitical instability tends to boost demand for assets that are “liquid,” “scarce,” and have “low counterparty risk,” suggesting that Bitcoin, commodities, and gold fit these criteria. After the initial drop, Bitcoin has retraced above $61,500, down slightly in the last 24 hours. [cryptobriefing]
BITCOIN
Bitcoin risks another ‘sell-the-news’ market move after halving
As the highly anticipated Bitcoin halving approaches, analysts are warning of the risk of another “sell-the-news” market move. JPMorgan and Deutsche Bank have suggested that the event is mostly priced in already, highlighting Bitcoin’s tendency to rally ahead of much-touted industry milestones, only to experience volatile price swings and letdowns in the aftermath.
This pattern was observed following the SEC’s approval of Bitcoin ETFs in January and after the digital asset reached an all-time high in early March.
The tit-for-tat Middle East conflict has overshadowed the halving in recent days, and if any volatile price swings occur, it could be due to the “sell-the-news” cycle. While the halving is expected to curb new supply of the token, its main implication, according to JPMorgan analysts, would be on Bitcoin mining. They predict that unprofitable miners will exit the Bitcoin network, leading to consolidation in the sector, with publicly-traded firms best positioned to gain market share.
Despite the potential for short-term volatility, some experts, such as Crypto.Com CEO Kris Marszalek, believe that the halving will make a “substantial difference” and is a “positive development for the market” over a longer period. [bloomberg]
ECOSYSTEM
Runes could solve Bitcoin’s long-term security: IntoTheBlock
As the Bitcoin halving approaches, the introduction of Runes, a new protocol for creating fungible tokens using Bitcoin’s infrastructure, could potentially solve the blockchain’s long-term security issues. According to IntoTheBlock’s “On-chain Insights” newsletter, Runes and Ordinals are likely to contribute to Bitcoin’s security budget and make the network more sustainable as inflationary rewards decline.
This development comes at a crucial time when miners’ BTC holdings are at a 12-year low, underscoring the urgency for alternative revenue streams.
The integration of Runes could provide a much-needed boost to the network’s economic model by amplifying fee generation and redirecting speculative activities to the Bitcoin blockchain.
As the halving event is set to reduce block rewards by 50%, transaction fees are anticipated to play an increasingly vital role in compensating miners.
The surge in transaction fees, which accounted for over 20% of total miner revenues in December 2023, combined with the potential impact of Runes, could help stabilize the network’s financial foundation and ensure its long-term security. [cryptobriefing]
Other News
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Hedgey Finance loses $44.5 million in flash loan exploit
Next Week’s Token Unlocks
- PENDLE unlock is set at $1.6M, a 0.3% increase in supply. The market cap is $562M.
- ID unlock is scheduled at $14M, which is a 4.3% rise in supply, with a market cap of $329M.
- CTSI will see an unlock of $4.5M, contributing to a 2.8% supply bump. Its market cap stands at $159M.
- SUI is looking at an unlock of nearly $1M, which translates to a 0.06% supply increase, alongside a market cap of $1.3B.
- RON’s upcoming unlock is $9.6M, indicating a 0.97% supply hike. The market cap is at $1B.
- IMX has an upcoming unlock of $74.19M, resulting in a 2.40% supply increase. IMX has a market cap of $3.09b.
- PIXEL’s upcoming unlock of $27.23M will increase the supply by 7.05%, with a market cap of $386.17M.
- CYBER’s upcoming unlock of $9.48M will increase the supply by 5.98%. CYBER has a market cap of $158.59M.
- RNDR’s upcoming unlock of $6.14M will increase the supply by 0.20%, and it has a market cap of $3.08b.
Vince & Diego
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