Bitcoin in April: The Impact of the Halving, Network Activity Surge, and ETF Updates
In April 2024, Bitcoin experienced a significant drop in price following the fourth halving event, but network activity reached record highs due to new protocols and ETF developments. This article provides an in-depth analysis of Bitcoin’s ecosystem and price movements during the previous month.
Key Points:
– The price of Bitcoin experienced a sharp decline after the halving, reaching a low of $57,000 before quickly rebounding. This drop marked the most significant decline since the FTX collapse.
– Despite the price drop, the Bitcoin network saw a surge in activity in April, with daily transactions reaching a record high of 927,000 on April 23. However, this increase was short-lived, and transactions dropped by the end of the month.
– The surge in network activity led to record-high transaction fees in April, peaking at $25.8 million on April 24. This congestion may be attributed to the launch of the Runes protocol.
– Spot Bitcoin ETFs experienced net outflows of $343.5 million in April, the first monthly outflows since their introduction in January. However, Hong Kong launched its first three spot Bitcoin ETFs in April, potentially becoming a prominent hub for Asian crypto investment.
– Bitcoin Ordinals NFTs gained traction, reaching a valuation of $2.3 billion, despite Binance discontinuing support due to network strain.
– Bitcoin remained the leader in NFT sales volume in April, generating over $594 million compared to other blockchains.
What You’ll Find in This Bitcoin Analysis for April:
1. Overview of Bitcoin and its Function
2. BTC Price Performance and Halving Charts
3. Bitcoin’s Network Activity and Fees
4. Spot Bitcoin ETFs
5. Bitcoin Mining Updates
6. Bitcoin DeFi Updates
7. Bitcoin Ordinals NFTs
8. Bitcoin NFTs’ Market Leadership
What is Bitcoin?
Bitcoin (BTC) is a decentralized cryptocurrency that serves as a digital currency and means of payment. It operates independently of any single individual, organization, or authority, eliminating the need for third-party intermediaries in financial transactions. Bitcoin was introduced to the public in 2009 by an enigmatic developer or group known as Satoshi Nakamoto and has since become the most widely recognized cryptocurrency worldwide. Its success has led to the creation of numerous other cryptocurrencies.
BTC Price Performance and Halving Charts
The fourth halving event in Bitcoin’s history took place on April 20, and as anticipated, it led to short-term price volatility. In April alone, Bitcoin’s price dropped by nearly 21%, falling below $60,000 on April 19 after a rally that pushed prices above $72,500 on April 8. Between April 30 and May 1, the price crashed below $57,000, reaching its lowest level since late February.
Historical data shows that previous halving events also resulted in similar price patterns. While the first halving saw an immediate 11% gain, the following two halvings led to price stagnation after two weeks. The 60-day period following halvings often exhibits sideways movement with price drops ranging from -5% to -15%.
According to Markus Thielen, CEO and senior analyst at 10x Research, Bitcoin could further drop to $52,000 due to a slowdown in inflows into Bitcoin ETFs, which declined in April. Fidelity Digital Assets downgraded Bitcoin’s outlook to “neutral” after Q1, suggesting that Bitcoin is no longer undervalued. However, analysts at Bitfinex believe that Bitcoin will consolidate for 1-2 months after the halving and expect it to remain the market leader.
Bitcoin’s Network Activity and Fees
Despite the price drop, Bitcoin’s network witnessed a surge in activity in April. Daily transactions increased by 135% after the halving, reaching a record high of 927,000 on April 23. However, this recovery was short-lived, and the number of daily transactions dropped to 403,000 by the end of the month.
Bitcoin’s daily active addresses also experienced fluctuations in April. Starting at 605,000 on April 1, the number climbed to 640,000 by April 4 before sharply dropping to 269,000 on April 20, the day after the halving. Activity partially recovered, reaching 483,000 by the end of the month.
Average daily transaction fees on Bitcoin surged to a record $25.8 million on April 24 before falling back to $6.15 million on April 30. The average fee for April was $16.77. Similarly, average individual transaction fees spiked to $40 on April 24 and dropped to $11.92 on April 30.
Bitcoin managed to attract more capital in April, with a total value locked (TVL) of $1.4 billion, a 94% increase compared to April 2.
The launch of the Runes protocol led to the most expensive block ever mined in Bitcoin’s history, with users spending 37.7 Bitcoin (over $2.4 million) to secure a spot.
Spot Bitcoin ETFs
April was a significant month for spot Bitcoin ETFs. After a period of high enthusiasm and record inflows in Q1 2024, April saw a shift in sentiment, with net outflows surpassing inflows for the first time since the introduction of Bitcoin ETFs in January.
Spot Bitcoin ETFs experienced net outflows of $343.5 million in April. The initial surge in inflows slowed significantly after peaking at $1.05 billion daily in mid-March. Grayscale’s GBTC fund saw the most significant outflows at $2.5 billion. However, BlackRock’s IBIT initially attracted the most inflows in April, followed by Fidelity’s FBTC and Bitwise’s BITB.
Hong Kong launched its first three spot Bitcoin ETFs in April, potentially becoming a prominent hub for Asian crypto investment. However, the inflows from these ETFs were not sufficient to cover the outflows from US-based spot Bitcoin ETFs.
Bitcoin Mining Updates
Bitcoin miners experienced a decline in earnings after the halving event reduced their rewards from 6.25 BTC to 3.125 BTC. The hash price fell below $45 per PH/s per day on May 2, despite a brief increase in revenue post-halving due to transaction fee windfall from the Runes frenzy.
Crypto analytics firm CryptoQuant reported a drop in the hash price from nearly $0.12 in early April to $0.07 post-halving. However, miners continue to mine Bitcoin, indicating that it remains profitable at current prices. Large miners may be forced to sell some Bitcoin if prices continue to drop.
The long-term effects of the halving on the hash rate and overall miner activity remain uncertain. Past halving events have seen some miners exit the market due to increased operational costs. The future of Bitcoin mining depends on factors such as price fluctuations and changes in electricity costs.
Bitcoin DeFi Updates
The emergence of Ordinals has revitalized the Bitcoin DApp ecosystem, demonstrating the potential for novel protocols on the network. The Runes protocol, launched on April 20, allows users to create tokens directly on the Bitcoin network, representing real-world assets.
Stacks, a Layer 2 network for Bitcoin, reached a record-high of 122,497 active accounts in April. Orders Exchange, a Bitcoin DEX, announced its 2024 roadmap, which includes integrating with major Web3 wallets and building a Bitcoin NFT marketplace. BEVM, a Layer 2 scaling solution for Bitcoin, attracted over 700,000 user addresses and 30+ ecosystem projects since its launch in March.
Bitcoin Ordinals NFTs
Bitcoin Ordinals NFTs have gained significant traction, reaching a valuation of $2.3 billion. These NFTs live solely on the Bitcoin blockchain, offering a secure and tamper-proof alternative to traditional systems. Binance discontinued support for Bitcoin Ordinals due to network congestion, but the market continues to thrive.
Bitcoin NFTs Lead the Market
Bitcoin remained the leader in NFT sales volume in April, generating over $594 million compared to other blockchains. The sales volume of Bitcoin-based NFTs reached 602 million, attracting around 113,000 buyers and 98,000 sellers. Notable NFT launches in April include Ordinal SigmaX, Rune Guardians, and Rune Mining Pups.
Looking Ahead – Can the Bitcoin Halving Charts be Inversed?
The April 2024 halving triggered short-term price volatility, but Bitcoin’s ecosystem continues to innovate and evolve. Factors such as institutional investment, regulatory developments, and advancements in Bitcoin DeFi will shape Bitcoin’s future trajectory. Despite the post-halving price correction, the influx of institutional interest, mining technology advancements, and the growing DeFi space point towards a dynamic future for Bitcoin. The interplay of these factors will determine Bitcoin’s path moving forward.
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