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Bitcoin has pulled back from all-time highs and other major cryptocurrencies have struggled as investors aren’t getting the bitcoin halving rise they want.

Investors have flocked to bitcoin and other cryptocurrencies in recent months following the launch of the first spot bitcoin exchange-traded funds in January. However, optimism surrounding the imminent launch of the first Ethereum spot ETFs has faded in recent weeks.

Additionally, cryptocurrency investors are increasingly concerned about a potential slowdown in the US economy as inflation remains stubbornly sticky while GDP growth fell sharply in the first quarter.

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April Crypto Market Performance

Entrance fees for new location bitcoin ETFs pushed bitcoin prices to new highs above $73,000 in March. However, bitcoin prices have retreated from April highs. They ended the month slightly above $60,000.

Similarly, after rising to $4,092 in March, Ethereum prices ended April just below $3,000 as investors continue to hope that the approval of the spot Bitcoin ETF will soon open the door to the approval of Ethereum ETFs in US spot. Security and Exchange Commission.

Although bitcoin prices fell more than 8% in April, they are still up about 50% year to date. Ethereum prices are also down over 8% for the month, but are up around 40% so far in 2024.

The largest bitcoin spot ETF by assets under management, the Grayscale Bitcoin Trust ETF (GBTC), fell 11% in April. However, this was caused by investor concerns about the annual cost of that particular fund, rather than any nervousness about cryptocurrency strategic issues or macroeconomic trends.

Among the top 10 cryptocurrencies by market capitalization, Toncoin (TON) was the best performer in April with a 5% gain. Avalanche (AVAX) was the worst performer with a 37% decline.

Bitcoin Halving Completed

The bitcoin network has completed its latest halving event on April 19th. Each time an additional 210,000 blocks of transactions are added to the bitcoin blockchain, the network automatically undergoes a halving, during which the reward that bitcoin miners receive for validating a block of transactions is cut in half.

Bitcoin halves reduce the supply of new BTC created. Historically, bitcoin prices have bottomed about a year before the halving occurs and continue to rise for about a year after the halving concludes.

The latest halving at block 840,000 on the Bitcoin blockchain was the fourth halving the Bitcoin network has completed since the crypto’s launch in 2009. The halving reduced the number of rewards Bitcoin miners receive for verifying a single block of transactions from 6.25 BTC to 3.125 BTC. .

Bitcoin Runes Launch

Bitcoin’s latest halving also coincided with the launch of Bitcoin Runes, a new protocol that will allow crypto enthusiasts to create and trade meme coins on the bitcoin blockchain. Meme coins are a subset of cryptocurrencies typically created as satire and as a tribute to Internet culture.

Bitcoin Runes was developed by Casey Rodarmor, who previously created and launched Bitcoin Ordinals in 2023. Bitcoin Ordinals effectively brought non-fungible tokens, or NFTs, to the Bitcoin network for the first time. The popularity of NFT trading on the Ethereum network and other blockchains has exploded in recent years.

Unlike NFTs, which are all unique, Bitcoin Runes allow for the creation of fungible tokens that are identical and interchangeable, much like different $1 bills.

The Bitcoin Runes market has very low liquidity and demonstrated extreme price volatility after its launch. By the end of April, more than two-thirds of Runes was in the red, and critics have criticized the protocol for its role in increasing bitcoin transaction fees.

Identify Ethereum ETFs?

VanEck, ARK Investment Management and seven other companies have filed with the SEC to launch spot Ethereum ETFs in the US

The first Ethereum ETF decision deadline is May 23 for the VanEck application. The ARK application decision deadline must be followed on May 24th. Unfortunately, candidates have reported that recent meetings with the SEC have been discouraging. Sources close to the matter suggest that the SEC will likely reject the first wave of Ethereum ETF spot applications.

The SEC approved the first batch of Ethereum futures ETFs in October 2023, leaving investors hopeful that a spot Ethereum ETF could arrive soon. Ethereum futures ETFs are held futures contractswhile a spot Ethereum ETF would hold the ETH cryptocurrency directly.

The SEC may want to watch the performance of Ethereum futures ETFs and spot bitcoin ETFs for an extended period before giving the green light to Ethereum spot ETFs.

More regulatory headaches ahead

Meanwhile, regulators continued to crack down on the cryptocurrency market in April:

• On April 24, the US Department of Justice filed charges against the co-founders of Samourai Wallet, linked to their alleged role in facilitating more than $100 million in money laundering.
• After the SEC sent Consensys Software a notice to Wells in early April warning the company of imminent enforcement action, Consensys filed a lawsuit against the SEC in response, challenging the regulator’s authority over Ethereum.
• On April 10, cryptocurrency exchange Uniswap Labs also disclosed that it received a notice from Wells from the SEC, notifying the exchange that the regulator plans to recommend legal action against it.

James Davies, co-founder and chief product officer of Crypto Valley Exchange, says the SEC’s actions against Samourai, Consensys and Uniswap have been much more impactful in recent weeks than the bitcoin halving.

“The bitcoin halving was largely priced in, and people were expecting the launch of Runas (the last of which was clearly a buy the news, sell the event situation), but these moves by the US regulator were not as telegraphed and will have much broader impacts for the industry”, says Davies.

However, Davies also says that Ripple and other crypto projects and platforms that regulators have targeted will continue to fight back in court.

“Importantly, Ripple’s apparent success in fighting the SEC in court has encouraged other projects to do the same, and we hope the countersuits set the stage for the legal battles that will define the future of the industry,” says Davies.

Other Crypto Headlines

On April 5, a New York jury sided with the SEC in its case against Terraform Labs and the company’s former CEO Do Kwon.

The jury ruled that the South Korean businessman and his company defrauded investors by misleading them about the stability of the TerraUSD stablecoin before its collapse in 2022, which wiped out $40 billion in value.

The Grayscale Bitcoin Trust ETF continues to face large outflows as investors dump GBTC shares in favor of spot bitcoin ETFs with a more investor-friendly fee structure.

As of mid-April, investors have withdrawn more than $16 billion from the GBTC fund since it was converted to an ETF on January 11. During the same period, the 10 competing bitcoin spot funds experienced more than $29 billion in net inflows.

Crypto Catalysts Ahead

Anthony Rousseau, head of brokerage solutions at TradeStation Group, says cryptocurrency investors can expect more volatility in May linked to the ongoing regulatory crackdown on cryptocurrencies.

“I believe the DOJ, SEC and this administration continue to attack the industry and will take every step possible to slow adoption,” says Rousseau.

However, Rousseau says the crypto train has apparently already left the station and it will be difficult for regulators to slow it down.

“The pace of attack in this industry has not stopped and adoption continues without taking into account [for] these events, which is amazing.”

Furthermore, the next few weeks could be a critical phase for the US economy. Investors tend to sell stocks, cryptocurrencies and other risky assets when they anticipate future economic weakness.

In April, the Department of Labor reported the consumer price index, or CPI, increased 3.5% year over year in March. This figure was higher than the 3.2% annual gain recorded in February and above the 3.4% growth that economists expected.

A few days later, the Commerce Department reported that U.S. GDP grew just 1.6% annually in the first quarter, below the 3.6% growth in the fourth quarter and well below the 2.4% growth that economists expected.

John Glover, chief investment officer at Ledn, says crypto investors will pay close attention to US economic data and monetary policy.

“Key to the price performance of bitcoin (a strong proxy for all cryptocurrencies) in May will be the US data releases, with all eyes on inflation data,” says Glover.

“Additional focus will be on the SEC and whether [SEC Chair Gary] Gensler succumbs to pressure to allow a spot ETH ETF in the US”

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