Bitcoin completed the fourth halving of network rewards last week, reducing rewards from 6.25 BTC to 3.125 BTC. The last halving event happened on May 11, 2020, which reduced rewards from 12.5 BTC.
While the reward reduction is expected to make transaction fees lower, increased activity on the network has negated this due to the introduction of Bitcoin Runes. Runes are a new fungible token standard on the Bitcoin blockchain and bring an alternative to BRC-20s. Early indications suggest that Runes will be a popular standard after the surprise success of Ordinals and bring about an entirely new wave of interest for many who saw the network as a store-of-value, as opposed to Ethereum’s smart contract network.
In another win for digital assets in Asia, Hong Kong’s financial regulator announced the approval of Bitcoin and Ether ETFs. The first batch of ETFs will begin trading on April 30, 2024. Hong Kong has been the stand-out regulatory leader for digital assets over the last year and the approval of in-kind ETFs (vs the United State’s cash-creation ETFs) allows the creation of ETF shares using BTC and ETH – a significant change that is likely to boost network activity and add a new dimension for investor opportunities.
Centralized Exchange (CEX) comparisons from weeks 4/16/2024 and 4/23/2024
Spot Trade Volume by Exchange for major token pairs
With last week’s historic Halving leading to increased trading activity, we see a relatively cooler trading atmosphere in the aftermath for CEXs this week. Last week was a critical moment for crypto as geopolitical influences drove strong price volatility, threatening to undo the price progression Bitcoin has made over the past quarter. However, with cooling geopolitical tensions and the Halving, Bitcoin bounced back the CEX trade volumes followed. In a post-Halvening world, it will be interesting to see if we will see a sustained bull market - great news for CEXs - or if we will drop back to pre-ETF levels as demand cools.
Decentralized Exchange (DEX) protocol from weeks 4/16/2024 and 4/23/2024
Uniswap V3 Pool Trading Volume over the last 60 days
Interestingly, WBTC_WETH is experiencing a 60-day market share low when compared to other asset pools. This may seem contradictory considering BTC is extremely popular right now, especially with the introduction of Runes and the Halving. Likely, BTC is more valuable to be held right now rather than be traded in a pool. DEXs in general seem to be in an overall cooling period, and we will likely see this trend continue as L2 popularity increases and people focus more on BTC.
DeFi Lending protocol comparisons from weeks 4/16/2024 and 4/23/2024
Net Borrow and Repay Volume over the past month across all lending protocols
Lending participants have increased their borrowing over the past week across all lending protocols. This is interesting especially after the large repay net volume we saw earlier in the month. Lenders are likely taking new positions in a post-halving market. Borrows can sometimes be used as a proxy to measure the risk appetite for crypto natives. While the borrowing bias is slight, this may be a sign that crypto users are willing to take on adventurous bets going forward.
Network comparisons from weeks 4/16/2024 and 4/23/2024
Bitcoin and Ethereum transaction counts over the last three months
With the introduction of Runes, Bitcoin transaction counts have been spiking over the last few days, moving from an average of around 500,000 transactions a day to nearly 700,000 transactions per day. Runes are proving to be a huge opportunity for investors and Bitcoin enthusiasts.
Bitcoin and Ethereum transaction fees over the last year
Looking at transaction fees, Runes is dramatically increasing Bitcoin network fees as well. Ethereum, meanwhile, is playing out a role reversal with transaction fees steadily decreasing since EIP-4844 and the introduction of blobs.
Bitcoin and Ethereum block sizes over the last three months
Blobs were created to offload limited block space from permanent on-chain data stores to temporary data stores, aimed at reducing transaction costs on the L1 and as a critical play to encourage the adoption of L2s. From what we’ve seen over the last two weeks: blobs and Runes appear to be working.
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AmberLens: intelligence.amberdata.com
Spot Market
Spot market charts were built using the following endpoints:
Futures
Futures/Swaps charts were built using the following endpoints:
DeFi DEXs
DeFi DEX charts were built using the following endpoints:
DeFi Borrow/Lend
DeFi lending charts were built using the following endpoints:
Networks
Network charts were built using the following endpoints: