Analysis of Market Conditions After Bitcoin Halving: Decline in Mining Revenue, Increase in Large Holding Addresses

Bitcoin completed its 4th Halving on April 20, with the block reward reduced to 3.125 BTC. This Halving has had a direct impact on Mining, with miner income significantly decreasing in the short term. At the same time, the Halving has also affected Bitcoin's inflation rate, and the market generally expects that the increase in scarcity will drive up coin prices. However, the reality is that since the Halving, Bitcoin has remained in a high-level sideways adjustment, with a slight price decline of 3.87%, putting pressure on miners and causing some short-term investors to face losses.

Each Halving is essentially a rebalancing process of market supply and demand. During this process, there are several key data points worth paying attention to:

1. Since March, the proportion of Bitcoin loss chips has risen from 1.28% to 15.18%. After the Halving, the average SOPR index for short-term investors is 0.99972, indicating that many short-term investors may have incurred losses due to Halving expectations.

2. After the Halving, the circulation rate of on-chain tokens decreased by 23%, with more chips in an accumulation state. Since the beginning of this year, the number of chips held for 1-3 months, 3-6 months, and 3-5 years has significantly increased. The number of Addresses holding 100-1000 BTC and 1000-10000 BTC has increased by more than 1.3%.

3. After the Halving, miners face significant income pressure. Based on the current coin price and high electricity costs, the shutdown price reaches $55,000, a substantial increase from $14,300 last August.

4. The current daily mining total revenue is approximately 26.4871 million USD, a decrease of 51.63% from the 54.7623 million USD before the halving. Daily trading fees are about 2.28 million USD, a decrease of 34% from before the halving.

5. If the transaction fees remain unchanged, to reach the average daily income level before the Halving, the coin price needs to rise to $94,489.82, which is an increase of 51.63% compared to the current price.

6. If the coin price remains unchanged, to achieve the average daily income before the Halving, the daily number of transactions needs to increase to 1.6737 million, an increase of 202.49% compared to the average after the Halving; or the transaction fee per transaction needs to reach 0.00080317 BTC, an increase of 206.08% compared to the average after the Halving.

7. The initial launch of the Runes protocol brought considerable profits to miners, contributing 881 BTC in fees on the first day.

Halving Market Changes

After the Halving, the price of Bitcoin did not rise significantly as expected, but instead experienced a slight decline. As of now (17 days later), the price of Bitcoin is approximately $62,400, with a decrease of 3.87%. This has led to a noticeable increase in the proportion of market loss chips, rising from 10.95% to 15.18%. In fact, since March, although the price of Bitcoin has been hovering above $62,500, the proportion of loss chips has already begun to rise, suggesting that some short-term investors may have incurred losses due to Halving expectations.

At the same time, the circulation speed of on-chain chips has significantly slowed down. The current 7-day average circulation rate is 0.01044, which has dropped nearly 23% compared to the day of the Halving, and nearly 33% compared to the beginning of the year. This may indicate that more chips are in the accumulation phase. From a time dimension perspective, the number of chips held for 1-3 months, 3-6 months, and 3-5 years has clearly increased, especially the proportion of chips held for 1-3 months has grown by 7.14 percentage points this year, and by 2.44 percentage points after the Halving, indicating a trend of accumulation shifting from short-term to medium-long term.

From the perspective of the balance of holding addresses, since the beginning of this year, the number of addresses holding 100-1000 BTC and 1000-10000 BTC has increased by 1.35% and 1.39% respectively, and this trend continues after the Halving. This indicates that the number of large holders is increasing and the chips are becoming concentrated.

Challenges Facing Mining

After the Halving, the overall network hashrate (7-day average) showed a significant decrease. The current hashrate is 582.2 EH/s, down 7.43% compared to the day of the Halving, which is a larger decline than the drop in coin price, possibly indicating that some miners are shutting down their mining machines to maintain profitability.

According to the current data, if the electricity cost is low ($0.07/kWh), there are still 31 models of mining machines that can operate profitably, with the minimum shutdown price at $32,200. However, if the electricity cost is high ($0.12/kWh), only 3 models of mining machines can be profitable, with the shutdown price above $55,200. This means that under the current market conditions, electricity cost has become a key factor in determining the survival of miners.

After the halving, mining revenue plummeted. Currently, the total daily mining revenue is about 26.4871 million USD, a decrease of 51.63% compared to before the halving. It is worth noting that on the day of the halving, due to the launch of the Runes protocol, the mining revenue reached 107 million USD, which is 95.06% higher than usual. This indicates that strong on-chain demand can compensate for the losses brought by the halving through transaction fees. However, as the popularity of Runes decreases, the current daily transaction fees are about 2.28 million USD, a decrease of 34% compared to before the halving.

Demand Side Performance

The demand side for Bitcoin remains weak at present. The number of transactions related to Runes has decreased from an initial 463,600 to 79,400, resulting in a decline in transaction fees from 881 BTC to 4 BTC. How to maintain the sustained demand for projects like Runes has become a key issue.

In terms of DeFi, the TVL on the Bitcoin chain has reached $1.208 billion, rising 296% this year, and has remained stable since the Halving. Among them, the newly launched AINN Layer2 has performed well, with a TVL of $590 million, becoming one of the main applications. Applications such as BiFi, Maya Protocol, and BoringDAO have also seen rapid TVL growth this year.

Overall, the Bitcoin Halving has led the market to undergo a process of rebalancing. Miners are facing income pressure, but the increase in large holding Addresses indicates a long-term accumulation trend. The future direction of the market will depend on the continued growth on the demand side and the development of new applications.