Bitcoin: increase in trading volumes, halving approaching, and growth in miner revenues

The volumes of Bitcoin transactions are experiencing a significant increase in anticipation of the halving, accompanied by a rise in miner revenues. 

According to the data provided by The Block, it is highlighted that the volume of Bitcoin traded in the last week is the highest in the last 18 months. 

According to a report from Bloomberg, Bitcoin miners are currently competing in purchasing equipment and searching for locations with reduced energy costs in order to optimize their operations.

Let’s see below all the details. 

Bitcoin trading record: miners in a frenzy to take advantage of the increase in volumes before the halving

As anticipated, the value of Bitcoin (BTC) has recorded an increase of 2.62%, reaching the figure of $71,361.62.

During the past week, the cryptocurrency surpassed its previous all-time high, exceeding $69,000 before experiencing a slight pullback. 

This increase has generated a significant increase in the volume of transactions on the network, contributing to the consequent increase in miner revenues.

According to data from The Block, the seven-day moving average of transaction volume on the Bitcoin network has reached the highest level since September 2022, which is 18 months ago. The increase in volume has reflected a corresponding increase in revenue for Bitcoin miners.

Currently, the seven-day moving average of miner revenues is $65.4 million, just below the all-time high of $67.2 million recorded in May 2021.

The price surge has been attributed to the success of the Bitcoin spot ETF in the United States. However, another event to keep an eye on is the Bitcoin halving, scheduled for about 40 days from now, around April 19th.

The halving, which involves halving the reward for miners, is traditionally seen as a bullish event for the price of Bitcoin.

Last month, the Bitcoin network also reached its highest ever mining difficulty level, indicating that the computational cost of mining a Bitcoin block has more than doubled in the last 12 months. 

However, it is expected that the difficulty level will decrease after the halving, as less efficient miners will be forced to exit the network, unable to maintain the profitability of their operations with a reduced reward.

Mining Bitcoin: record expenses and energy challenges

In recent months, the rise in the price of Bitcoin has prompted mining companies to invest over 1 billion dollars in new equipment, as reported in a detailed Bloomberg report based on some public documents.

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An analysis of the situation highlights that the mining companies CleanSpark and Riot have each committed over 400 million dollars to purchase new machines.

The report also highlights the increasing demand for energy in the sector, with miners increasing energy consumption by 33% compared to the same period of the previous year. 

The challenge for mining companies is not only about acquiring machines, but also about finding economical and reliable sources of electricity to progress in an increasingly competitive market.

While Texas has maintained its popularity as a preferred destination for Bitcoin miners in recent years, a shift in trend is observed with Chinese companies directing their investments towards new regions, such as Ethiopia.

An interesting aspect emerged from the report is the situation of an unnamed company that purchased mining machines for a significant amount, estimated between 350 and 400 million dollars. 

However, it is stuck in the impasse of not having a suitable place to install them. This scenario highlights the complexities and logistical challenges that companies must face in the competitive Bitcoin mining sector.

Glassnode: contribution of ETFs and the paradigm shift in the market

Glassnode, in its recent analysis, highlights the significant entry of institutional funds into the Bitcoin (BTC) market, especially following the approval of Exchange Traded Funds (ETFs) on bitcoin spot in the United States.

This influx, against the skepticism of critics, has led to a significant increase in the value of Bitcoin, which reached the threshold of 70,000 dollars last week, recording a jump of 58% compared to the previous 42,800 dollars before the approval of the ETFs.

The Glassnode report reveals a crucial transformation in the Bitcoin landscape, characterized by an increase in miner rewards from 22 to 49 million dollars per day. 

This is accompanied by significant changes in exchange flows, with a transition from pre-ETF inconsistencies to stable demand. Particularly highlighted by a daily withdrawal of $17 million post-approval, according to Glassnode data.

At the same time, US BTC ETFs have recorded an average daily net inflow of $299 million, generating a daily net capital inflow of about $267 million in Bitcoin. 

This phenomenon has significantly contributed to the surge of the market towards new all-time highs, representing a significant change in market dynamics. 

The in-depth analysis by Glassnode also explores the long-term holders’ behavior patterns. In this regard, it reveals an increase in their presence in the market as Bitcoin approaches record levels. 

This behavior aligns with patterns observed in past cycles, suggesting a measured reaction to the upward trajectory of the market and perhaps indicating the beginning of a new peak in the market cycle.