In the wake of Bitcoin’s fourth halving, which occurred on April 20, the cryptocurrency market is reportedly experiencing a unique set of dynamics. Bitfinex’s latest “Bitfinex Alpha” report, published on April 22, delves into the on-chain data, revealing positive signals for Bitcoin despite the backdrop of economic uncertainty in the United States.

According to the report, Bitcoin exchange outflows are reaching levels not seen since January 2023, indicating that many investors are moving their holdings to cold storage, anticipating potential price increases. This trend suggests a growing confidence in Bitcoin’s long-term value proposition, even as the market navigates the immediate post-halving period.

Interestingly, the typical pre-halving price drop, often precipitated by active selling from long-term holders, has not yet materialized. The Bitfinex Alpha report suggests that this selling pressure is being absorbed by new market entrants, highlighting the resilience of Bitcoin’s current market structure.

Miners, too, are adapting to the reduced block reward by adjusting their strategies. The report notes a decrease in the amount of BTC sent to exchanges by miners, implying that they have been preemptively selling or collateralizing their holdings to upgrade infrastructure. This approach spreads potential selling pressure over a more extended period, mitigating the risk of a sudden market shock.

Bitfinex says the post-halving daily issuance rate of Bitcoin, estimated to add between $30 to $40 million worth of supply per day, is significantly outpaced by the $150 million average daily net inflow from spot Bitcoin ETFs. Their report mentions that this supply-demand imbalance underscores the potential for further price appreciation. However, the report cautions that the market’s response to the current geopolitical risks will provide crucial insights into Bitcoin’s long-term viability and valuation as a “digital gold” asset.

The Bitfinex Alpha report also highlights the complex interplay of international and domestic factors shaping the U.S. economic landscape. According to Bitfinex, while tensions in the Middle East have escalated concerns in global markets, particularly influencing oil prices, American consumer behavior has remained resilient, with retail sales data from March showing sustained consumer spending, supported by strong job growth despite rising consumer prices. This robust economic activity, combined with the recent uptick in inflation, Bitifinex argues, is influencing the Federal Reserve’s monetary policy, with expectations now leaning towards a postponement of interest rate cuts possibly until September.

The report also touches upon recent developments in the cryptocurrency industry, such as the U.S. Inland Revenue Service’s introduction of Form 1099-DA to enhance the reporting of digital asset transactions and the surging public interest in cryptocurrencies, as evidenced by the record-breaking Google searches for “Bitcoin halving.”

Finally, the Bitfinex Alpha report mentions Tether’s launch of four new business divisions—Data, Finance, Power, and Education—aimed at leveraging technology to build inclusive infrastructure solutions and promote financial empowerment globally.

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