Dynamic balance after BTC halving: Mining machine shutdown price rises to $55,000, large holders rapidly increase

Author: Carol, PANews

Bitcoin successfully completed its 4th halving on April 20, reducing the block reward to 3.125 BTC. The halving will primarily impact mining, leading to a sharp decline in miner income in the short term. Additionally, the halving will affect Bitcoin's inflation rate, with market expectations that increased scarcity will drive the price further up. However, the reality is that since the halving, Bitcoin has remained in a high-level sideways adjustment, with a slight price drop of 3.87%, putting miners under pressure and causing many short-term investors to face losses.

Essentially, each halving represents another dynamic balance of supply and demand in the market. During this rebalancing process, what market fund movements are worth noting? How significant is the pressure faced by miners? What is the current demand side situation for Bitcoin? After a comprehensive analysis of current market data, mining data, and other demand-side data by PAData, a data column under PANews, the following findings were made:

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

• After the halving, the on-chain token circulation rate decreased by 23%, with more chips in the accumulation process. From a time cycle perspective, this year, the number of chips held for 1 to 3 months, 3 to 6 months, and 3 to 5 years has significantly increased; from the perspective of different balance holding addresses, the number of addresses with balances between 100 BTC and 1000 BTC, as well as between 1000 BTC and 10000 BTC, has increased by more than 1.3%.

• Miners are facing significant revenue pressure post-halving. Based on current coin prices and high electricity costs, the shutdown price is $55,000, a substantial increase from last year's lowest shutdown price of $14,300 in August.

• Current daily mining revenue is approximately $26.4871 million, down 51.63% from the average daily revenue of $54.7623 million before this year's halving. The current daily transaction fee is about $2.28 million, down 34% from the average daily fee before this year's halving.

• Assuming transaction fee income remains unchanged, maintaining the current average transaction fee and transaction volume, to achieve the average daily revenue level before this year's halving, the price needs to reach $94,489.82, which is an increase of 51.63% from the current price.

• Assuming the price remains unchanged, to achieve the average daily revenue level before this year's halving, the number of transactions needs to reach 1.6737 million, which is an increase of 202.49% from the post-halving average, or the average transaction fee needs to reach 0.00080317 BTC, which is an increase of 206.08% from the post-halving average.

• The strong demand at the launch of Runes was able to bring huge profits to miners, contributing 881 BTC in fees on the first day.

1. The proportion of loss-making chips rises to 15% post-halving, and the number of large holding addresses above 100 BTC has significantly increased

A potential market consensus is that Bitcoin's price will rise significantly after the halving. Historical data shows that in the year (365 days) following the last three halvings, Bitcoin's price increased by 8069.11%, 256.85%, and 478.10%, respectively.

However, in the short term, the impact of Bitcoin's halving on price is slow. In the short term (17 days) after the last three halvings, Bitcoin's price increased by 9.73%, 0.97%, and 6.98%. However, since this halving, Bitcoin has remained in a high-level sideways trend, currently around $62,400, with a drop of about 3.87%.

The price not meeting expectations has led to a significant increase in the proportion of loss-making chips in the market. Since the halving, Bitcoin's price has fluctuated between $64,900 and $62,400, with the proportion of loss-making chips rising from 10.95% to 15.18%. In fact, the situation of price stagnation but an increase in the proportion of loss-making chips began before the halving. Since March, Bitcoin's price has been consolidating above $62,500, while the proportion of loss-making chips has continuously risen from 1.28%. This indicates that many short-term investors may have incurred losses due to halving expectations.

The SOPR index for short-term investors also indirectly confirms this possibility. An index less than 1 indicates that investors holding for more than 1 hour but less than 155 days are overall at a loss. According to CryptoQuant data, the current index is 1.0022, very close to 1, and the average index after the halving is 0.99972, indicating that short-term investors are currently in an overall loss state.

While prices are sluggish, the on-chain chip circulation speed has also significantly slowed down. According to Glassnode data, the current circulation rate (7-day average) is 0.01044, down nearly 23% from 0.01356 on the day of the halving, and down nearly 33% from the beginning of the year, showing a significant decline.

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

From the perspective of different balance holding addresses, this year, among addresses marked as Entities (referring to clusters of addresses controlled by the same network entity, which may include exchange addresses, foundation addresses, whale addresses, miner addresses, etc.), the number of addresses with balances between 100 BTC and 1000 BTC, as well as between 1000 BTC and 10000 BTC, has significantly increased, with increases of 1.35% and 1.39%, respectively, and this phenomenon continues to exist after the halving. Among all addresses, the number of addresses with balances between 1000 BTC and 10000 BTC has increased by 1.07%. These data indicate that the number of large holders is increasing, and chips are in the process of gathering.

2. Hashrate drops over 7% post-halving, daily mining revenue falls to $26.49 million

After the Bitcoin halving, the overall network hashrate (the average hashrate over the last 7 days) has shown a significant decline. According to Glassnode data, the current hashrate is 582.2 EH/s, down 7.43% from the day of the halving. The decline in hashrate exceeds the decline in coin price, which may indicate that miners have shut down some mining machines to maintain profitability.

According to F2Pool data, based on the shutdown prices of different mining machines, miners are currently facing significant revenue pressure. Based on the coin price of $62,315.29 on the day of data collection, if the mining machine is located in an area with low electricity costs, assuming a charge of $0.07 per kWh, then the shutdown price is below the current coin price, and there are 31 models of mining machines that can still be profitable. Among them, the Antminer S21 Pro has the lowest shutdown price of $32,200, with a daily net profit of $5.52. According to BTC.com data, last August, the lowest shutdown price was still $14,300.

If the mining machine is located in an area with high electricity costs, assuming a charge of $0.12 per kWh, then only 3 models can still be profitable: Antminer S21 Pro, Antminer S21 Hyd, and Antminer S21, with shutdown prices above $55,200.

If the current market situation does not improve, the level of electricity costs will be a crucial factor determining the survival of miners. If the market situation improves, to what extent can miners relieve their pressure?

Assuming electricity costs remain low, when the coin price rises to $80,000, the number of profitable mining machines will increase to 45, with the lowest shutdown price still being the Antminer S21 Pro, and the highest daily net profit being the Shennong M63S (390T), reaching $12.30. When the coin price rises to $100,000, the number of profitable mining machines will increase to 66, with the lowest shutdown price still being the Antminer S21 Pro, and the highest daily net profit being the Shennong M63S (390T), reaching $18.41. As the coin price rises, the variety of mining machines available to miners increases significantly, allowing for diversified configurations.

Post-halving, mining revenue has sharply decreased. According to CryptoQuant data, the current total daily mining revenue is approximately $26.4871 million, down 51.63% from the average daily revenue of $54.7623 million before this year's halving. However, it is worth noting that on the day of the halving, due to the launch of the Runes protocol, the mining revenue that day was approximately $107 million, which was 95.06% higher than the average daily revenue before this year's halving.

The strong increase in on-chain demand can compensate for the losses miners face due to the halving through transaction fees. On the day Runes was launched, transaction fees reached $80.58 million, accounting for 75% of total revenue. However, as the enthusiasm for Runes cooled and transaction volume declined, the current daily transaction fee is about $2.28 million, down 34% from the average daily fee before this year's halving.

Miner's mining revenue (in USD) = (block reward + transaction fees) * coin price, so the reduction in miner income due to the halving can be compensated in two ways: first, if transaction fee income remains unchanged, then the coin price needs to rise significantly; second, if the coin price remains stable, then transaction fee income needs to rise significantly and continuously. Of course, this is a static and simplified analysis, aimed at demonstrating the potential impact of Bitcoin halving on coin price and transactions.

According to CryptoQuant data, the average daily mining revenue before the halving was $54.76 million, and the average daily block count after the halving was 139 blocks, meaning the average block reward after the halving was 434.23 BTC, and the average transaction fee after the halving was 0.0002624 BTC, with an average daily transaction total of 553,328.19 transactions.

Assuming transaction fee income remains unchanged, maintaining the current average transaction fee and transaction volume, miners need the coin price to reach $94,489.82 to achieve the average daily revenue level before this year's halving, which is an increase of 51.63% from the current price.

Assuming the coin price remains unchanged, while transaction fees remain unchanged, to achieve the average daily revenue level before this year's halving, the number of transactions needs to reach 1.6737 million, which is an increase of 202.49% from the post-halving average.

Assuming the coin price remains unchanged, while the number of transactions remains unchanged, to achieve the average daily revenue level before this year's halving, the average transaction fee needs to reach 0.00080317 BTC, which is an increase of 206.08% from the post-halving average.

3. Bitcoin demand side remains weak, TVL and various Runes data decline

Estimating the scale of the impact on mining post-halving is important, as unprofitable miners will pose a threat to the underlying security of the blockchain. Besides coin price, transaction fees and transaction volume are direct reflections of demand, so what is the current demand situation for Bitcoin?

From Runes, according to the dashboard data from @cryptokoryo in Dune Analytics, the relevant transaction volume has dropped from an initial 463,600 transactions to the current 79,400 transactions, with fees dropping from 881 BTC to the current 4 BTC. From daily mining revenue, it can be seen that the strong demand at the launch of Runes was able to bring huge profits to miners. The current question is how to maintain the sustainability of demand for Bitcoin projects like Runes.

In addition, Bitcoin's Layer 2 and the DeFi potential brought by Runes may also stimulate more usage demand. From the current situation, according to DefiLlama statistics, Bitcoin's current TVL has reached $1.208 billion, up 296% this year, and has remained stable since the halving. Among them, besides the Lightning Network, the recently launched AINN Layer 2 has also performed well, with a current TVL of $590 million, becoming a major application in the Bitcoin ecosystem. Additionally, applications like BiFi, Maya Protocol, and BoringDAO have also achieved rapid growth in TVL this year.