Summary US traders stayed more bullish than EU and Asia participants, as the price of BTC rose during US trading hours but was negative in EU and Asia trading. 85% of Bitcoin addresses are currently in profit, although there has been a slight 5% decrease in the last month. Total daily BTC miner revenues fell by 19%, with heavy competition for hash rate ahead of the Bitcoin halving. Bitcoin’s Price Action Market sentiment: Bitcoin dominance stayed flattish at 51% as BTC’s 30-day average price fell 3% in January. Regional trading: US traders stayed more bullish than EU and Asia participants, as the price of BTC rose during US trading hours but was negative in EU and Asia trading. This dynamic represents a continuation of a long-standing trend in which Bitcoin is generally mined and sold in Asia and purchased during US hours. Source: Glassnode, as of 2/2/24. Past performance is no guarantee of future results. Funding rates: Bitcoin futures annualized basis (funding costs) fell sharply to 11% as traders lost their appetite for leverage after the Bitcoin ETFs launched. Bitcoin’s Network Activity, Adoption, and Fees Daily transactions: Daily transactions are down 18% in the last 30 days, but the overall adoption and network activity remain extremely strong, in the 97th percentile of all-time. Ordinal inscriptions: Daily inscriptions (aka ordinals) activity fell 34% in the last month. Total transfer volume: However, total transfer volume has increased by 10% in the last 30 days, reaching $39.6 billion. This divergence may reflect larger institutional participation in the wake of the spot ETF launches. Average transaction fees: Average transaction fees, both in USD and BTC, have experienced a significant 70% decrease in the last 30 days as inscription activity has cooled. Bitcoin Market Health and Profitability Percent of addresses in profit: 85% of Bitcoin addresses are currently in profit, although there has been a slight 5% decrease in the last month. Such levels are not typically associated with a very frothy market. Net unrealized profit/loss: Likewise, a net unrealized profit/loss ratio (NUPL) of 0.48 suggests that network participants are optimistic about the future but not euphoric. Bitcoin Miners Total daily BTC miner revenues: Total daily BTC miner revenues fell by 19%, with heavy competition for hash rate ahead of the Bitcoin halving. Miners’ BTC transfers to exchanges fell somewhat from December’s very high levels but still remain high (87% percentile) vs. history as miner balance sheets must be fortified ahead of the halving. Crypto equities’ market cap fell 14% m/m vs. the avg BTC price -3%. Chart of the Month: January BTC Transfer Volume Rises Despite 3% Drop in Average Price Total Transfer Volume ((USD)) Source: Glassnode as of 1/31/24. Past performance is no guarantee of future results. Bitcoin ChainCheck Monthly Dashboard Source: Glassnode, VanEck research as of 2/2/24. Past performance is no guarantee of future results. Notes: Net unrealized profit/loss ratio (NUPL) can be calculated by subtracting the realized market cap from the market cap and dividing the result by the market cap. When a high percentage of Bitcoin’s market cap consists of unrealized profits, it can be interpreted that investors are greedy. Background reading here . Links to third party websites are provided as a convenience and the inclusion of such links does not imply any endorsement, approval, investigation, verification or monitoring by us of any content or information contained within or accessible from the linked sites. By clicking on the link to a non-VanEck webpage, you acknowledge that you are entering a third-party website subject to its own terms and conditions. VanEck disclaims responsibility for content, legality of access or suitability of the third-party websites. Disclosures Coin Definitions Bitcoin (BTC) is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Risk Considerations This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its other employees. Index performance is not representative of fund performance. It is not possible to invest directly in an index. The information, valuation scenarios and price targets presented on any digital assets in this commentary are not intended as financial advice, a recommendation to buy or sell these digital assets, or any call to action. There may be risks or other factors not accounted for in these scenarios that may impede the performance these digital assets; their actual future performance is unknown, and may differ significantly from any valuation scenarios or projections/forecasts herein. Any projections, forecasts or forward-looking statements included herein are the results of a simulation based on our research, are valid as of the date of this communication and subject to change without notice, and are for illustrative purposes only. Please conduct your own research and draw your own conclusions. Investments in digital assets and Web3 companies are highly speculative and involve a high degree of risk. These risks include, but are not limited to: the technology is new and many of its uses may be untested; intense competition; slow adoption rates and the potential for product obsolescence; volatility and limited liquidity, including but not limited to, inability to liquidate a position; loss or destruction of key(s) to access accounts or the blockchain; reliance on digital wallets; reliance on unregulated markets and exchanges; reliance on the internet; cybersecurity risks; and the lack of regulation and the potential for new laws and regulation that may be difficult to predict. Moreover, the extent to which Web3 companies or digital assets utilize blockchain technology may vary, and it is possible that even widespread adoption of blockchain technology may not result in a material increase in the value of such companies or digital assets. Digital asset prices are highly volatile, and the value of digital assets, and Web3 companies, can rise or fall dramatically and quickly. If their value goes down, there’s no guarantee that it will rise again. As a result, there is a significant risk of loss of your entire principal investment. Digital assets are not generally backed or supported by any government or central bank and are not covered by FDIC or SIPC insurance. Accounts at digital asset custodians and exchanges are not protected by SPIC and are not FDIC insured. Furthermore, markets and exchanges for digital assets are not regulated with the same controls or customer protections available in traditional equity, option, futures, or foreign exchange investing. Digital assets include, but are not limited to, cryptocurrencies, tokens, NFTs, assets stored or created using blockchain technology, and other Web3 products. Web3 companies include but are not limited to, companies that involve the development, innovation, and/or utilization of blockchain, digital assets, or crypto technologies. All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future performance. © Van Eck Associates Corporation. Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
