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Bitcoin appears to be running out of steam just before one of the most anticipated milestones among cryptocurrency enthusiasts.

The largest digital token tumbled over the weekend, declining about 13% to around $8,675. It rebounded to about $8,840 as of 10 a.m. in New York trading on Monday. The decline took place ahead of a closely watched technical event known as its halving, when the rewards miners receive for processing transactions will be cut in half as soon as later today.

Bitcoin Tops $10,000 First Time Since February, Before Halving

Its likely that were going to see increased volatility through May, with the pandemic, ongoing stimulus measures and the halving, Rich Rosenblum, co-head of trading at crypto market maker GSR, said in an email. The record open interest for futures and options at multiple exchanges adds to this. The market is in a state of information and position overload, exacerbating the potential for volatile moves.

Still, Bitcoins up near 25% this year and among its newest fans is famed macro investor Paul Tudor Jones, who said hes been buying Bitcoin as a hedge against the inflation he sees coming from central bank money-printing.

Its not the great cure for all the monetary ills, et cetera. Its a great speculation, Jones, the founder and chief executive officer of Tudor Investment Corp., said in an interview with CNBC on Monday. Hes got over 1% of his assets in Bitcoin, though it might end up being a top performer within his portfolio, he said.

Earlier: Paul Tudor Jones Buys Bitcoin With Reminder of Gold in 1970s

Bitcoin, which is a little more than a decade old, has not stood the test of time, said Jones, but the digitization of the world clearly benefits the token. He sees an expanding user base for the cryptocurrency, a hallmark of every bull market, and anyone buying Bitcoin is betting that universe will continue to broaden.

Were watching the birthing of the store of value -- and whether that succeeds or not, only time will tell, said Jones in the interview. What I do know is, every day that goes by and Bitcoin survives, the trust in it will go up.

In the near-term, many Bitcoin are looking forward to its halving, which happens about every four years and slows down the rate at which new tokens are created -- an intentional feature designed to control inflation. Bitcoin has historically bottomed 459 days prior to the halving, risen into the event and jumped after, according to research from Pantera Capital. Post-halving rallies averaged 446 days.

Heres a QuickTake on what Bitcoins halving means.

So far, Bitcoins third halving looks different to prior events and there doesnt appear to have been such a sustained price run-up, said Payal Lakhani, director of equity research and product development at CME Group, in a blog post Friday. Given the reward change has been known since Bitcoins inception in 2009, and having already seen two such events, investors may have already incorporated the supply adjustment into their models and taken positions accordingly.

The impact of Covid-19 has resulted in lower volumes as some participants focused on non-crypto markets, and some mining operations being affected by these difficult market conditions, Lakhani said.

With assistance by Eric Lam

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Bitcoin Crashes as Halving Hype Loses Impetus Over the Weekend - Bloomberg