VanEck March 2024 Bitcoin ChainCheck
April 01, 2024
Read Time 4 MIN
Please note that VanEck has exposure to bitcoin.
Our on-chain snapshot for March 2024 reveals heightened transfer activity, fewer transactions, and record Bitcoin mining revenues even with a slowdown in Ordinals demand. At these levels, we still like Bitcoin miners for a catch-up trade.
- Bitcoin’s Price Action
- Bitcoin’s Network Activity, Adoption, and Fees
- Bitcoin Market Health and Profitability
- Bitcoin Miners
- Bitcoin ChainCheck Monthly Dashboard
Some takeaways for March 2024:
Bitcoin’s Price Action
- Market sentiment: In March, Bitcoin's price surged to an average of $65,504, a 38% monthly increase, reflecting growing investor confidence as we approach the next halving event.
- Regional trading: Trading volumes across the U.S., Asia, and Europe are becoming more balanced, with a 10% increase in price changes across these regions, potentially indicating a more globally unified investment interest in Bitcoin.
Source: Glassnode, as of 3/25/24. Past performance is no guarantee of future results.
- Funding rates: The annualized cost to roll Bitcoin futures contracts jumped sharply to 21%, indicating bullishness about Bitcoin price and a shortage of dollar funding across the space.
Bitcoin’s Network Activity, Adoption, and Fees
- Daily transactions: In contrast to the market's upward trajectory, Bitcoin's daily transactions declined by 4%.
- Ordinal inscriptions: Daily inscriptions dropped by 27%, reflecting reduced activity in this specific area of the Bitcoin network.
- Total transfer volume: $69.34 billion in value was transferred across the Bitcoin network daily, an explosive increase of 74%, elevating this activity into the 90th percentile of historical performance.
- Average transaction fees: The average user paid $7.68 in fees to send a Bitcoin transaction in March, an increase of 25% of m/m, reflecting the growing cost of network participation amid surging demand, a fee level that ranks within the 93rd percentile historically.
Bitcoin Market Health and Profitability
- Percent of addresses in profit: 98% of Bitcoin addresses are now in profit, suggesting nearly universal profitability for Bitcoin holders in the current market climate. Historically, once this number reaches 100%, the Bitcoin price tends to make repeated all-time highs.
- Net unrealized profit/loss: This ratio climbed to 0.61, indicating a growing optimism within the market, but not yet at the “euphoric” levels above 0.75 that mark previous peaks.
Bitcoin Miners
- Total daily BTC miner revenues: Miners enjoyed a significant 35% boost in average daily revenues in March, reaching $62.84 million, a figure that places their earnings in the 99th percentile for historical miner revenue. We have been expecting Bitcoin miners to reverse their recent underperformance YTD, which is beginning to occur.
Chart of the Month: Bitcoin vs. Bitcoin Miners
Source: Bloomberg, as of 3/25/24. XBTUSD Curncy is the XBTFUSD Spot Exchange Rate. BTCMINER Index is a custom index. See definitions in disclosures. Past performance is no guarantee of future results.
Bitcoin ChainCheck Monthly Dashboard
Source: Glassnode, VanEck research as of 3/25/24. 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.
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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.
XBTUSD Curncy is the XBTFUSD Spot Exchange Rate measuring the performance of the price of bitcoin.
BTCMINER Index is a custom, equal-weighted index comprising of the top 4 U.S. bitcoin miners by market capitalization (CIFR, CLSK, MARA, and RIOT).
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.
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.
XBTUSD Curncy is the XBTFUSD Spot Exchange Rate measuring the performance of the price of bitcoin.
BTCMINER Index is a custom, equal-weighted index comprising of the top 4 U.S. bitcoin miners by market capitalization (CIFR, CLSK, MARA, and RIOT).
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.