Bitcoin in April: Price Slump After Halving, Network Activity Surges, and ETF Updates
Bitcoin experienced a significant price drop in April, following the fourth halving event. However, network activity reached record highs due to new protocols and developments in the ETF market. This report provides an analysis of Bitcoin’s ecosystem and price developments during the month of April.
Key Takeaways:
– The price of Bitcoin dropped after the halving event, reaching a low of $57,000 before quickly rebounding. This marked the sharpest decline since the FTX collapse.
– Despite the price drop, Bitcoin’s network activity surged in April, with daily transactions reaching a record high of 927k on April 23. However, this increase was short-lived and dropped again 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, marking the first monthly outflows since their launch in January.
– While US ETFs faced outflows, Hong Kong launched its first three spot Bitcoin ETFs in April, potentially becoming a hub for Asian crypto investment.
– Bitcoin Ordinals NFTs gained traction, reaching a valuation of $2.3 billion, despite Binance ending 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:
What is Bitcoin?
BTC Price Performance and Halving Events
Bitcoin’s Network Activity and Fees
Spot Bitcoin ETFs
Bitcoin Mining Updates
Bitcoin DeFi Updates
Bitcoin Ordinals NFTs
Bitcoin NFTs Lead the Market
Looking Ahead – Can the Bitcoin Halving Events be Predicted?
What is Bitcoin?
Bitcoin (BTC) is a decentralized cryptocurrency that operates independently of any individual, organization, or authority. It was created as a digital currency and means of payment that eliminates the need for intermediaries in financial transactions. Bitcoin is allocated to blockchain miners to validate transactions and can be purchased through various exchanges. It was introduced to the public in 2009 by an enigmatic developer or group known as Satoshi Nakamoto and has since become the most recognized cryptocurrency in the world.
BTC Price Performance and Halving Events
Bitcoin’s fourth halving event took place on April 20, following a historical trend of short-term price volatility. The price of Bitcoin dropped nearly 21% in April, falling below $60,000 on April 19 after a rally that pushed prices above $72,500. Between April 30 and May 1, the price of Bitcoin reached its lowest level since late February, dropping below $57,000. Similar patterns were observed in previous halving events, with price stagnation and drops in the 60-day period following the events. Analysts predict further price drops, with some expecting Bitcoin to consolidate for 1-2 months after the halving.
Bitcoin’s Network Activity and Fees
Despite the price drop, Bitcoin’s network activity experienced a surge in April. Daily transactions increased by 135% after the halving, reaching a record high of 927k on April 23. However, this recovery was short-lived, and the number of daily transactions dropped again by the end of the month, reaching 403k on April 30. Bitcoin’s daily active addresses also saw fluctuations, with a sharp dip on April 20, the day after the halving, followed by a partial recovery by the end of the month.
Average daily transaction fees on Bitcoin reached a record high of $25.8 million on April 24 before falling back to $6.15 million on April 30. The average fee in April was $16.77. Bitcoin’s total value locked (TVL) also increased in April, reaching $1.4 billion, a 94% increase compared to April 2.
The launch of the Runes protocol contributed to the high transaction fees and network congestion. Users spent over $2.4 million in fees on the first halving block, making it the most expensive block ever mined in Bitcoin’s history. Runes offers an alternative to existing token creation methods on Bitcoin and accounted for a significant portion of network transactions in April.
Spot Bitcoin ETFs
April was a notable month for spot Bitcoin ETFs. After a period of inflows in the first quarter of 2024, April saw significant outflows from these funds, marking the first monthly net outflows since their launch in January. Spot Bitcoin ETFs saw $343.5 million withdrawn in April, with Grayscale’s GBTC fund experiencing the most significant outflows at $2.5 billion. However, Hong Kong launched its first three spot Bitcoin ETFs in April, potentially becoming a hub for Asian crypto investment.
Bitcoin Mining Updates
Bitcoin miners felt the impact of the halving event, which reduced their earnings from 6.25 BTC to 3.125 BTC. The hash price, an indicator of mining profitability, fell to record lows after the halving event. Despite the reduction in rewards, miners continue to mine Bitcoin, indicating that it is still profitable at current prices. However, if Bitcoin prices continue to drop, large miners may be forced to sell some of their holdings to stay afloat.
Bitcoin DeFi Updates
The launch of the Runes protocol revitalized the Bitcoin DeFi ecosystem. Several developments in the Bitcoin DeFi space were observed in April. The Stacks network reached a record high of 122,497 active accounts, indicating growing interest in Bitcoin-native DApps. The Orders DEX unveiled its 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 received an investment from Bitmain.
Bitcoin Ordinals NFTs
Bitcoin Ordinals NFTs continued to gain traction in April, reaching a valuation of $2.3 billion. Despite Binance ending support for Bitcoin Ordinals due to network strain, the market for Bitcoin NFTs remained strong. Bitcoin remained the leader in NFT sales volume, generating over $594 million compared to other blockchains.
Looking Ahead – Can the Bitcoin Halving Events be Predicted?
The April 2024 halving event triggered short-term price volatility in the Bitcoin market. The future trajectory of Bitcoin will be influenced by factors such as institutional investment, regulatory developments, and advancements in the DeFi space. The entry of major financial institutions like Morgan Stanley and UBS into the spot Bitcoin ETF market could drive broader investor interest. However, the DTCC’s decision not to consider Bitcoin as collateral for loans may limit its appeal for some institutional investors. Regulatory developments, such as Norway’s data center registration requirement, could impact Bitcoin mining operations. Continued innovation in the Bitcoin DeFi space and the adoption of Layer 2 solutions could drive further activity. Despite the price correction after the halving, the Bitcoin market continues to show signs of innovation and growth, with institutional interest, mining advancements, and DeFi developments shaping its future trajectory.
