Bitcoin experienced a 3% decline from its 24-hour high on Feb. 29, coinciding with investors pulling $598.9 million from Grayscale’s spot Bitcoin exchange-traded fund (ETF) — its second-largest net outflow on record.
The Grayscale Bitcoin Trust (GBTC), recently converted to an ETF, witnessed daily net outflows of $600 million on Feb. 29, marking the second-largest outflow day after Jan. 22’s record of $640.5 million.
The significant outflows from GBTC could offset the record-high net inflows of $673.4 million across ten U.S. spot Bitcoin ETFs on Feb. 28. Notably, Fidelity’s Bitcoin ETF, among the top three largest funds, recorded only $44.8 million in net inflows.
JPMorgan analysts cautioned investors about a potential Bitcoin price decline after the “halving euphoria” subsides. They predicted a drop to $42,000 post-April halving, attributing it to a projected 20% decrease in mining difficulty due to miners with inefficient rigs going offline.
The analysts suggested that miners with less efficient machines might withdraw their rigs as running costs increase, leading to a 20% reduction in Bitcoin’s hash rate and mining difficulty. This scenario aligns with estimates made by Galaxy Digital.
The mining difficulty drop might not occur if inefficient rigs remain profitable, especially with demand from Bitcoin ETFs and elevated Bitcoin prices. However, the analysts warned of a possible price slide to $42,000 after the halving event, highlighting the complex dynamics affecting Bitcoin’s trajectory.
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