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Bitcoin is close to $40,000, the market is digesting after crazy weeks

Bitcoin approached the symbolic threshold of $40,000 on Friday, after having come close to $50,000 ten days ago, in the midst of a backlash following a sequence which led to the launch of a new product.

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Bitcoin is close to $40,000, the market is digesting after crazy weeks

Bitcoin approached the symbolic threshold of $40,000 on Friday, after having come close to $50,000 ten days ago, in the midst of a backlash following a sequence which led to the launch of a new product. investment in digital currency. Around 9:45 p.m. GMT, the star cryptocurrency recovered and gained 1.36%, to $41,628. Earlier, it fell to $40,273, the lowest in a month.

For Michael Elliott, CFRA analyst, the decline in the digital currency is due to the arrival of ETFs (Exchange Traded Funds), bitcoin investment funds authorized ten days ago by the American financial markets regulator (SEC). ). “For several months, it seemed likely that these ETFs were going to be approved, and the excitement increased,” he recalled, to the point of taking bitcoin up to $49,021. “When that happened, a lot of people took their profits” and sold bitcoin, which had doubled in value in a year.

These ETFs allow any investor to place their money in a fund containing cryptocurrencies, but while keeping their assets in dollars and with the possibility of exiting at any time. The market was notably affected by massive withdrawals from the GBTC (Grayscale Bitcoin Trust) fund, which existed before the SEC decision and which was transformed into an ETF last week. For Matthew Graham, managing partner of the private equity firm Ryze Labs, investors already present in the world of cryptocurrencies have decided to reallocate funds towards other digital currencies, in particular Ethereum, bitcoin's runner-up in terms of capitalization.

After the launch of bitcoin funds, hope has now shifted to the possible authorization of an Ethereum ETF. Seven files are currently being examined by the SEC, which has until the end of May to respond to the oldest, submitted by the management company VanEck. Although it also lost altitude after the authorization of bitcoin ETFs, Ethereum held up better and is still above its level two weeks ago. For Michael Elliott, bitcoin should change little in the short term, pending a new catalyst.

This event could be the “halving”, a phenomenon which consists of halving the reward of bitcoin “miners” (operators who create the currency). The operation makes the creation of bitcoin less financially attractive and thus tends to slow down the rate of growth of the digital currency in circulation, which is likely to support its price. The “halving” occurs every four years and the next deadline is expected in April.

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