Journalist
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Key Takeaways
What is the state of the Bitcoin network activity?
Despite record BTC prices, on-chain activity and the Bitcoin fee revenue were at multi-year lows.
Could this be a threat to miners and the network security?
Miners were under no imminent threat, and network security remained healthy, as the rising hashrate showed.
Bitcoin [BTC] miners were now choosing to hold BTC instead of selling.
Recently, AMBCrypto reported that September saw increased Bitcoin miner flows to Binance, raising questions about selling pressure. However, this behaviour has shifted, and the on-chain flows have cooled.
The $110k-$112k region remained a strong support zone that bulls must defend to keep alive the promise of a bullish move past $123k and onto $140k.
The 11% rise in the Stock-to-Flow ratio reinforced the scarcity of BTC and hence its bullish narrative.
While demand for the asset continued apace, network activity has weakened significantly. In a post on X, Messari Research Manager AJC noted that Bitcoin was virtually “a ghost town”.
“Bitcoin is now averaging under $500K in daily fee revenue ($179M annualized), the lowest since the advent of ordinals and runes. When do miners start getting concerned?”
In contrast, when network activity surged in the first half of 2024, fees exceeded millions of dollars daily. This reflected a strong demand for block space, a demand that has largely disappeared now.
Assessing Bitcoin miner health
Miner revenue is split into the block subsidy (or block reward), which is 3.125 BTC per block mined, and transaction fees. A new block is mined roughly every 10 minutes.
The transaction fee is the sum of all fees paid by users for the transaction included in the block. This is paid to the miners in BTC.
As the checkonchain data shows, the daily miner revenue was at $61 million on the 10th of September.
Miners remained healthy because the network is supported not just by transaction fees but also by the appreciation of BTC.
The demand for Bitcoin is borne not just by on-chain users, but also by institutions and governments.
Bitcoin treasury companies such as Strategy [MSTR] have been growing in popularity and number over the past two years.
ETF demand also highlighted that the leading crypto was seen more as a store of value than a settlement network.
The Bitcoin network continued to see rising hash rates, and miners were not under imminent threat despite the falling network activity.
