The past week has seen some interesting trends in the network activity and market dynamics of Bitcoin (BTC), the world's first and largest cryptocurrency.
Bitcoin Wealth Flows From Old Investors to New Investors
According to the report by Glassnode, a cryptocurrency analysis firm, Bitcoin is experiencing an increase in mining difficulty and fees, as well as a transfer of wealth from old investors to new investors.
Glassnode's report revealed that realized wealth (individual contributors) held in coins newer than three months has experienced a relative increase of close to 100%, from a low cycle of 10.3% to current value of 20.8%. This indicates that new demand is entering the market and buying Bitcoin from long-term wallets, a mechanic common in previous cycle floors.
The report also noted that the latest upward Bitcoin mining difficulty adjustment has reached an all-time high as more hashrate is transferred to the network, and now requires 225 zetahash (10^21) to generate a new block. This shows that the Bitcoin network has become more secure and resistant to attacks and more profitable for miners.
The #Bitcoin realized wealth held by coins aged less than 3 months (retail participants) has experienced a near 100% relative increase from the cycle low of 10.3%, to a current value of 20.8%.
This suggests the early stages of wealth transfer from experienced participants to new… pic.twitter.com/JSJU5V32eM
— glassnode (@glassnode) June 16, 2023
Bitcoin miner fees remain high at $1.03 million, similar to values observed ahead of the 2021 main bull market.
However, current wage value fell $16.77 million (-94.2%) last month, down from $17.8 million to $1.03 million, compared with the sharp wage growth experienced during peak demand for BRC-20. This indicates that network congestion has eased and transactions have become cheaper.
Finally, Glassnode's report showed that total withdrawals this week outpaced deposits by around 10%, revealing that the self-holding strategy remains the preferred strategy for investors in general. A similar dynamic was observed in the last big news about the stock market, which was the collapse of FTX.
*Not investment advice.
