Glassnode Reports Rising Bitcoin Hashrate, ETF Outflows, and Lower Investor Engagement

The latest report from Glassnode shows that Bitcoin's hashrate continues to increase despite a decline in miner revenue. At the same time, investor participation in exchanges and trading volumes are showing a significant decline, reflecting a decrease in speculative demand.

Miners Persist Amid Bitcoin Market Challenges as Investors Reduce Activity

Bitcoin miners continue to demonstrate resilience, as highlighted in Glassnode’s onchain report. Despite declining revenue, miners have pushed the Bitcoin hashrate to an all-time high (ATH). The report notes that while miners have struggled with volatile revenue, including a 22% drop since March, they have continued to install new hardware, bringing the industry’s competitiveness to new heights. Additionally, block subsidy revenue remained strong at $824 million, even as transaction fee revenue fell to $20 million, due to reduced demand for onchain transactions.

Glassnode also found that investor engagement with exchanges is declining. On-chain trading volumes associated with exchanges are falling, suggesting that investor interest in short-term trades is waning. Both bitcoin and ethereum exchange-traded funds (ETFs) are experiencing outflows, the report said, further reflecting the slowdown in market activity.

“Starting with bitcoin ETFs, we can see that net USD inflows have declined slightly since August 2024 and are currently reporting outflows of $107 million/week,” the report stated.

Glassnode's report adds:

Combined, ethereum ETFs have experienced a total outflow of -$13.1 million, highlighting the disparity in demand between [bitcoin and ether], at least in the context of current market conditions.

Miners, who previously sold a large portion of their block rewards to cover operating costs, are now holding onto more newly minted bitcoins. The shift highlights a strategic shift as miners anticipate future price increases. However, the increasing mining difficulty, combined with rising energy costs, is putting additional pressure on miner profitability. With hashrate at record highs and revenue dwindling, Glassnode warns of potential selling pressure if market conditions worsen.

In summary, Glassnode’s latest report paints a picture of a bifurcated bitcoin market. While miners remain optimistic about the long-term viability of the network, short-term investors are hesitant, as evidenced by declining trading activity and ETF outflows. As network fundamentals remain strong, the dynamic between miner activity and investor sentiment will continue to shape the future trajectory of the crypto asset.

Will bitcoin miners’ resilience be enough to counteract waning investor interest or will the market continue to be volatile? Share your thoughts in the comments below.
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