Bitcoin and other cryptocurrencies experienced mixed performance on Tuesday as investor interest seemed to shift away from Bitcoin towards other digital currencies. This shift in interest comes after the approval of exchange-traded funds (ETFs) tied to spot trading of Bitcoin, the largest cryptocurrency.
Bitcoin saw a modest rise of 0.5% over the past 24 hours, reaching $42,874. This places Bitcoin back within its established trading range of $42,000 to $44,000, which was in place before the Securities and Exchange Commission (SEC) approved the first Bitcoin spot ETFs last week. It is worth noting that Bitcoin briefly surpassed the $49,000 mark upon receiving SEC approval.
According to Fineqia International analyst Matteo Greco, investors have been capitalizing on profits from previously established positions at lower Bitcoin price levels. These profits are then being reallocated towards alternative coins or altcoins. Greco believes that this pattern of capital reallocation is a common occurrence and does not indicate a failure in the ETF launch.
The initial trading days of Bitcoin ETFs saw net inflows totalling around $800 million, as reported by Greco. Moving forward, market focus is expected to shift towards the potential approval of ETFs tied to other cryptocurrencies such as Ether, currently the second largest cryptocurrency.
Looking specifically at Bitcoin, attention will now be turned to the anticipated "halving" event scheduled for April. This event occurs approximately every four years and involves cutting the reward for mining Bitcoin in half. The purpose of this process is to limit token supply and theoretically drive up prices.
In addition to Bitcoin, Ether experienced a 0.5% increase, reaching $2.528. Among smaller cryptocurrencies, Solana saw a 2.2% gain, while Cardano suffered a 0.7% decrease. Dogecoin, on the other hand, had a 0.4% increase in value.