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Investing.com - Investors continue to keep a close eye on the cryptocurrency sector and how it is affected by the approval of the ETF. Simon Peters, cryptoasset analyst at eToro, notes that "the impact on the Bitcoin price has been one of volatility. On the ETF's first day of spot trading (Thursday) it tested the $49,000 level for the first time in two years, before falling to $42,000, where it ended the week."

"Bitcoin currently trades at $42,400 but now that institutional investors can gain exposure to through a regulated vehicle, we could be looking at an explosive 2024," Peters highlights.

"Interestingly, ether was the best performing asset following the SEC announcement and is currently up 7% against bitcoin (as indicated by ) since the ETF's approval. Perhaps it is a sign that the market believes this could be the next cryptocurrency to get approval for a spot ETF application, given that it is the second largest cryptoasset by market capitalisation and that futures ETFs are already approved and available," he says.

As Peters advances, the focus will now turn to the next halving of the block reward, halving' (currently scheduled for 97 days from now, on 22 April 2024).

"Historically, halving (an event built into bitcoin's design, which decreases the mining reward by 50%) has marked the start of bitcoin's next bull market. The per-block reward will fall from 6.25 BTC to 3.125 BTC, and bitcoin's annual inflation rate will fall from around 1.7% to around 0.85%, below 1% for the first time," explains the eToro analyst.

In addition, Peters notes that "the bitcoin hashrate, which is a measure of the total computational power of the Bitcoin network) reached an all-time high of 630 EH/s (630 quintillion hashes per second) on 11 January following the expected SEC announcement".

"Since the Chinese mining crackdown in mid-2021, Bitcoin's hashrate has continued to rise regardless of market sentiment, cementing itself as the most secure cryptocurrency network and arguably one of the most secure computer networks in general," concludes this expert.

Translated from Spanish using DeepL.

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Just Bitcoin? Keep an eye on Ethereum after the 'ok' to the ETF: "2024 could be explosive" By Investing.com - Investing.com UK