As the week of the Bitcoin halving closed, a report found that this historical moment for the crypto industry was leading to fear among investors.
A CoinShares report has found that digital asset investment products—like spot Bitcoin ETFs and exchange-traded products—have seen outflows for the second consecutive week, up to $206 million from $106 million the week prior.
This comes in the weeks leading up to the Bitcoin halving, which occurred April 20, where mining rewards were cut in half. The report suggests that investors worried about the consequences of this halving.
As this would suggest, the large majority of these outflows have come from Bitcoin at $192 million, with Ethereum second at $34 million. During last week Bitcoin fell 9%, according to CoinGecko.
The Race Is On to Mint One of the First Bitcoin Runes
With the Bitcoin halving only hours away, the race is on to mint the first tokens on the new Bitcoin Runes protocol set to launch alongside the quadrennial event. Runes is a new fungible token protocol on Bitcoin that will let users “etch” and mint tokens on top of the chain. It’s akin to the experimental BRC-20 standard launched last year, but is said to be more efficient—and comes from the inventor of the Ordinals protocol. In any case, as with the NFT-like Ordinals before it, project creators...
Alongside this, ETFs and funds that contain blockchain equities—like MicroStrategy, Square, and Coinbase—have seen 11 consecutive weeks of outflows, totalling $9 million. This is in line with last week's Farside Investor data which saw record-tying five day outflows from Bitcoin ETFs.
Interestingly, this negative sentiment is almost solely showing up in U.S. ETFs, which saw $244 million outflows last week, while other countries like Canada and Switzerland saw moderately sized inflows. The report suggests that ETP/ETF appetite continues to wane due to reports that the Federal Reserve Board (FED) is unlikely to drop interest rates this year.
What's Next for Bitcoin After the Halving?
Welcome to Bitcoin’s fifth epoch. Following the network’s programmed reduction in newly issued Bitcoin, a new era of digital scarcity has been ushered in. Like clockwork on Friday, the reward that miners earn for validating Bitcoin transactions was slashed in half for the fourth time since the blockchain’s launch. Bitcoin’s so-called halving occurred at just after 8pm ET on Friday. As a result, miners will earn 3.125 BTC per block created until some time likely in 2028. It’s part of miners’ dues...
Despite investor fear that the halving would negatively impact miners it appears that, in the short-term, the halving was positive for miners. According to Blockchain.com data, miner daily revenue spiked from $71 million the day prior to the halving to $107 million on the day of the event.
This spike was in part due to the launch of Runes, a new rival to the BRC-20 Bitcoin token standard, which saw projects raising funds to become one of the first 10 runes etched onto the Bitcoin network. Runestone, for example, raised over $140,000 to spend on network fees in an attempt to be one of the first. It was later claimed, that the project etched the third Rune called DOG•GO•TO•THE•MOON.
Edited by Stacy Elliott.
