Author: Jason Jiang, OKG Research
Miners play an important role in the Bitcoin network, but due to the impact of the halving event and the sharp reduction in handling fees after the concepts of inscriptions and runes calmed down, the income of miners is not optimistic recently, and the unit computing power income has reached the lowest level in history. OKLink data shows that in the past two months, the unit computing power income of the Bitcoin network has fallen below $0.05 several times. Although there has been a brief rebound during this period, it has now fallen back to a relatively low point again.
Due to the deterioration of income, many inefficient miners were forced to choose to exit the market, resulting in a significant decline in Bitcoin computing power. OKLink data shows that the Bitcoin network computing power has decreased by 15% from its peak in the past two months, and has been in a state of continuous decline in the past week.
As computing power declines, miners have also increased their selling efforts recently, becoming one of the biggest selling pressures in the market. According to IntoTheBlock data, Bitcoin miners have sold more than 50,000 Bitcoins since 2024, and the Bitcoin reserves held by miners have gradually dropped to the lowest level ever. Compared with the excessive leverage and long-term holding tendency of miners in previous cycles, miners are now more concerned about short-term returns. This may be due to the fact that with the reconstruction of computing power, many listed companies have become an important driving force for the scale and mainstream development of the mining industry.
The compensation plan announced by the Mt.Gox trustee on June 24 also brought about huge selling pressure expectations. This is not the first time that Mt.Gox has repaid its debts, but it is the first time that compensation has been made in the form of BTC and BCH. This means that after the compensation begins, a large amount of BTC and BCH will flow into the market. However, the author believes that the selling pressure caused by the Mt.Gox compensation will be less than expected. The reasons are as follows:
The number of bitcoins that will eventually flow into the market from this compensation is expected to be far less than 140,000. According to Alex Thorn, head of research at Galaxy Digital, it is estimated to be only around 65,000.
After the compensation is paid, the selling pressure will be dispersed. In theory, creditors will not sell at the same time in a short period of time. In addition, the market has already digested some of the selling expectations brought by Mt. Gox, so the final impact will not be as great as expected.
More importantly, considering the current stage of the market, rational creditors may prefer to continue holding rather than sell immediately.
Whether it is the selling pressure caused by the miners or the Mt.Gox compensation, we believe that the impact on the crypto market is short-term and limited. The experience of the past decade has told us that despite many challenges, as the most solid consensus in the crypto market, the Bitcoin ecosystem has always had strong market resilience and elasticity. Therefore, short-term selling pressure will not change the long-term trend, but will enhance the adaptability of the Bitcoin ecosystem to large-scale flows. Compared with short-term selling pressure, what should be paid more attention to at present is the "dismal" situation of Bitcoin chain transactions and liquidity.
Although Bitcoin has performed poorly recently, it has still achieved a positive return of over 40% since the beginning of the year, far exceeding most targets in the traditional financial market. However, after hitting a record high in March, the transaction volume of the Bitcoin network (left picture) has continued to decline. On the one hand, this is due to the decline in trading demand due to the decline in popularity of inscriptions and runes, and on the other hand, in the current price range, neither short-term speculators nor long-term investors have strong trading demand, and the on-chain turnover rate has always remained at a low level.
The number of active addresses on the chain (right picture) also dropped sharply after March. The number of active addresses is currently less than 700,000, which has fallen by more than 30% from the peak in 2024 and is almost the same as the same period in 2018.
In addition to the sluggish on-chain transactions, the recent performance of Bitcoin spot ETFs has also been relatively weak. As the main channel for the crypto market to obtain external liquidity in the current cycle, Bitcoin spot ETFs are also an important carrier to support the optimistic sentiment in the future market. Previously, JPMorgan Chase estimated that the crypto market had a net inflow of US$12 billion this year, of which the Bitcoin spot ETF had a net inflow of about US$16 billion.
However, since June, Bitcoin spot ETFs have experienced net outflows for many days. From June 7 to date (as of June 25), nearly 20,000 Bitcoins have been outflowed, which is about 1.228 billion US dollars at the current price. Such performance is difficult to satisfy investors. The "quiet" handling of the seized Bitcoin by the German and US governments has made the market even more tense.
Although the above data seems to prove that Bitcoin is in trouble, there are also many positive signs in the market.
One of the important characteristics of the real top in past cycles is that the proportion of short-term holders (holding time less than 155 days) has increased significantly, and even dominated the market. This is because in the process of reaching the top, long-term holders will gradually choose to profit and leave, resulting in the market being controlled by short-term investors and new entrants. However, according to OKLink data, the current Bitcoin market is still dominated by long-term holders, and Bitcoin held for less than 6 months accounts for less than 20%, which is much lower than the proportion of short-term holders near the top of the previous cycle. This market structure dominated by long-term holders provides stable support for Bitcoin in the current range. At the same time, considering that nearly 80% of the Bitcoin in circulation is currently profitable, most investors are still in a favorable position, so large-scale sell-offs in the short term are theoretically unlikely to occur.
On the other hand, the Bitcoin reserves of exchanges also hit a new low in June. Despite the low point, the low reserves of exchanges actually released a clear signal that the selling pressure of Bitcoin is not actually high. At the same time, the low reserves of exchanges also indicate that the Bitcoin market is in a period of high-speed accumulation, although we are not completely clear about the structure of the group that takes Bitcoin away from the exchanges.
Of course, the progress of the US Ethereum spot ETF is also worth paying attention to. Although the correlation between Bitcoin and Ethereum has decreased, it still remains above 0.8, which means that the mutual influence between the two is very obvious. If the Ethereum spot ETF can drive Ethereum to rebound again after it is officially listed and traded in early July, Bitcoin may also gain some impetus for its rise.
