Dynamic balance after BTC halving: mining machine shutdown price rises to $55,000, and large coin holders grow rapidly

Original title: "Dynamic balance after BTC halving: mining income plummets, shutdown price reaches $55,000, and large holders grow rapidly"

Original author: Carol, PANews

Bitcoin has successfully completed its fourth halving on April 20. After this halving, the block reward has dropped to 3.125 BTC. Halving will first affect the mining industry, and miners' income will plummet in the short term. In addition, halving will also affect Bitcoin's inflation rate. The market expects that the increase in scarcity will drive the price of the currency further up. But the actual situation is that since the halving, Bitcoin has still been sideways at a high level, and the price has fallen slightly by 3.87%, which has made miners face stress tests and many short-term investors face losses.

In essence, each halving is another dynamic balance of market supply and demand. In this rebalancing process, what trends in market funds are worth paying attention to? How big is the pressure facing the mining industry? What is the current demand side of Bitcoin? PAData, a data column under PANews, comprehensively analyzed the current market data, mining data and other demand-side data and found that:

· Since March, the proportion of Bitcoin loss chips has continued to rise from 1.28% to 15.18%. After the production cut, the average SOPR index of short-term investors is 0.99972, and many short-term investors may suffer losses due to the expectation of production cuts.

· After the production cut, the circulation rate of tokens on the chain decreased by 23%, and more chips are in the process of accumulation. From the perspective of time period, the number of chips with a holding period of 1 month to 3 months, 3 months to 6 months, and 3 years to 5 years has increased significantly since this year; from the perspective of holding addresses with different balances, the number of addresses with balances between 100 BTC and 1000 BTC, and between 1000 BTC and 10000 BTC has increased significantly by more than 1.3%.

· Miners are facing greater revenue pressure after the production cut. According to the current currency price and higher electricity costs, the shutdown price is $55,000, a significant increase from the lowest shutdown price of $14,300 in August last year.

· The current total daily mining revenue is about $26.4871 million, a decrease of 51.63% from the average daily revenue of $54.7623 million before the halving this year. The current daily transaction fee is about 2.28 million US dollars, which is 34% lower than the average daily fee before the halving this year.

· Assuming that the transaction fee income remains unchanged, that is, maintaining the current average transaction fee and number of transactions, then to achieve the average daily income level before the halving this year, the currency price needs to reach 94489.82 US dollars, which is equivalent to a 51.63% increase from the current currency price.

· Assuming that the price of the currency remains unchanged, the average daily income level before the halving this year requires 1.6737 million transactions, which is equivalent to an increase of 202.49% over the daily average after the halving, or an average transaction fee of 0.00080317 BTC per transaction, which is equivalent to an increase of 206.08% over the daily average after the halving.

· The strong demand at the beginning of Runes' launch can bring huge profits to miners, contributing 881 BTC in fees on the first day of launch.

01. The proportion of loss chips after the reduction in production has risen to 15%, and the number of large-amount currency addresses with more than 100 BTC has increased significantly

A potential market consensus is that the price of Bitcoin will rise sharply after the reduction in production. Historical data shows that within one year (365 days) after the past three production cuts, the price of Bitcoin increased by 8069.11%, 256.85%, and 478.10% respectively.

But in the short term, the impact of Bitcoin production cuts on prices is slow. In the short term (17 days) after the past three production cuts, the price of Bitcoin increased by 9.73%, 0.97%, and 6.98%. However, since this production cut, Bitcoin has remained sideways at a high level, currently (17 days) at around $62,400, a drop of about 3.87%.

The price of the currency is not as expected, resulting in a significant increase in the proportion of losing chips in the market. Since the production cut, the price of Bitcoin has fluctuated between $64,900 and $62,400, and the proportion of losing chips has increased from 10.95% to 15.18%. In fact, the price of the currency has been sideways, but the proportion of losing chips has increased since before the production cut. Since March, the price of Bitcoin has been sideways above $62,500, while the proportion of losing chips has continued to rise from 1.28%. This means that many short-term investors may suffer losses due to the expectation of production cuts.

The SOPR index of short-term investors also confirms this possibility from the side. The index is less than 1, indicating that investors who hold the currency for more than 1 hour but less than 155 days are generally losing money. According to CryptoQuant data, the current index is 1.0022, very close to 1, and the average value of the index after the production cut is 0.99972, which indicates that short-term investors are in a state of overall loss in the near future.

As prices are low, the circulation speed of chips on the chain has also slowed down significantly. According to glassnode data, the current circulation rate (average of the past 7 days) is 0.01044, which is nearly 23% lower than 0.01356 on the day of the production cut, and nearly 33% lower than the beginning of the year, a significant drop.

The rapid decline in the circulation rate may mean that more chips are in the process of accumulation. From the perspective of time cycle, the number of chips with a holding period of 1 month to 3 months, 3 months to 6 months, and 3 years to 5 years has increased significantly since this year. In particular, the proportion of chips held for 1 month to 3 months has increased by 7.14 percentage points this year and increased by 2.44 percentage points after halving, indicating a trend of accumulation from short-term to medium- and long-term holding cycles.

From the perspective of currency holding addresses with different balances, since the beginning of this year, among the addresses marked as Entities (referring to the address cluster controlled by the same network entity, which may be exchange addresses, foundation addresses, whale addresses, miner addresses, etc.), the number of addresses with balances between 100 BTC and 1000 BTC and between 1000 BTC and 10000 BTC has increased significantly, by 1.35% and 1.39% respectively, and this phenomenon still exists after the halving. Among all addresses, the number of addresses with balances between 1000 BTC and 10000 BTC increased by 1.07%. These data show that the number of large currency holders is growing and the chips are in the process of gathering.

02. After the reduction, the computing power dropped by more than 7%, and the daily mining income dropped to 26.49 million US dollars

After the reduction of Bitcoin production, the computing power of the entire network (referring to the average computing power in the last 7 days) has dropped significantly. According to glassnode data, the current computing power is 582.2 EH/s, which is 7.43% lower than the day of the reduction. The decline in computing power exceeds the decline in the price of the currency, which may indicate that miners have shut down some mining machines in order to maintain interest rates.

According to the data of f 2 pool, judging from the shutdown prices of different mining machines, miners are currently facing greater revenue pressure. According to the coin price of $62,315.29 on the day of data collection, if the mining machine is located in an area with lower electricity costs, assuming that it charges $0.07/kWh, then the shutdown price is lower than the current coin price, and there are 31 mining machine models that can still make a profit. Among them, the Antminer S 21 Pro has the lowest shutdown price of $32,200, with a daily net revenue of $5.52. According to BTC.com data, the lowest shutdown price was still $14,300 in August last year.

If the mining machine is located in an area with higher electricity costs, assuming that it charges $0.12/kWh, then there are only 3 mining machine models that can still make a profit, namely Antminer S 21 Pro, Antminer S 21 Hyd, and Antminer S 21, with a shutdown price of more than $55,200.

If the current market conditions cannot improve, then the electricity fee is an important factor in determining the life and death of miners. If the market conditions improve, to what extent can the pressure on miners be relieved?

Assuming that the electricity fee remains low, when the coin price rises to $80,000, the number of profitable mining machines will reach 45, and the lowest shutdown price is still Ant S 21 Pro, and the highest daily net income is Shenma M 63 S (390 T), reaching $12.30. When the coin price rises to $100,000, the number of profitable mining machines will reach 66, and the lowest shutdown price is Ant S 21 Pro, and the highest daily net income is Shenma M 63 S (390 T), reaching $18.41. When the coin price rises, for miners, the types of mining machines available for selection increase significantly, and they can be configured in a diversified manner.

After the halving, mining revenue has dropped sharply. According to CryptoQuant data, the current total daily mining revenue is about 26.4871 million US dollars, a decrease of 51.63% from the average daily revenue of 54.7623 million US dollars before the halving this year. But it is worth noting that on the day of the halving, due to the launch of the Runes protocol, the mining revenue on that day was about 107 million US dollars, which was 95.06% higher than the average daily revenue before the halving this year.

The strong increase in on-chain demand can make up for the losses brought to miners by the halving through fees. On the day Runes went online, the transaction fee reached 80.58 million US dollars, accounting for 75% of the total revenue. But as the popularity of Runes cools down and the transaction volume decreases, the current daily transaction fee is about 2.28 million US dollars, a decrease of 34% from the average daily fee before the halving this year.

Miner mining income (US dollars) = (block reward + transaction fee) * coin price, so the reduction in miner income caused by halving can be directly compensated in two aspects. First, assuming that the transaction fee income remains unchanged, the coin price needs to rise sharply. Second, assuming that the coin price is basically stable, the fee income needs to rise sharply and continuously. Of course, this is a static and simple analysis, the purpose is to show the potential impact of Bitcoin halving on coin price and transactions.

According to CryptoQuant data, the daily average value of mining income before halving was 54.76 million US dollars, and the average daily block volume after halving was 139 blocks, that is, the average block reward after halving was 434.23 BTC, the average transaction fee per transaction after halving was 0.0002624 BTC, and the average daily total number of transactions after halving was 553328.19 times.

Assuming that the transaction fee income remains unchanged, that is, maintaining the current average transaction fee and number of transactions, the miners need to reach the average daily income level before this year's halving, the coin price needs to reach 94489.82 US dollars, which is equivalent to an increase of 51.63% over the current coin price.

Assuming that the coin price remains unchanged and the transaction fee remains unchanged, the number of transactions required to achieve the average daily income level before this year's halving is 1.6737 million, which is equivalent to an increase of 202.49% over the daily average after halving.

Assuming that the coin price remains unchanged and the number of transactions remains unchanged, the average daily income level before this year's halving requires an average transaction fee of 0.00080317 BTC, which is equivalent to an increase of 206.08% over the daily average after halving.

03. Bitcoin demand remains weak, TVL and Runes data decline

It is estimated that the impact of halving on the mining industry is significant, and unprofitable miners will pose a threat to the underlying security of the blockchain. In addition to the price of the currency, transaction fees and transaction times are direct reflections of demand, so what is the current demand for Bitcoin?

From the perspective of Runes, according to the @cryptokoryo dashboard data in Dune Analytics, the number of related transactions has dropped from the initial 463,600 to the current 79,400, and the fees have dropped from 881 BTC to the current 4 BTC. From the daily mining income, it can be seen that the strong demand for Runes at the beginning of its launch can bring huge benefits to miners. The question now is how to maintain the sustainability of demand for various Bitcoin projects such as Runes.

In addition, the DeFi imagination brought by Bitcoin's Layer 2 and Runes may also stimulate more usage demand. From the current situation, according to DefiLIama statistics, the current TVL on the Bitcoin chain has reached 1.208 billion US dollars, an increase of 296% since the beginning of this year, and has remained basically stable after the halving. Among them, in addition to the Lightning Network, the recently launched AINN Layer 2 has also performed well, with a current TVL of 590 million US dollars, becoming the main application in the Bitcoin ecosystem. In addition, applications such as BiFi, Maya Protocol, and BoringDAO have also achieved rapid growth in TVL this year.

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