Dex-Trade News Digest: Bitcoin Mining Rebound and Ethereum’s June Performance
Bitcoin Mining Profitability Bounced Back in June: Jefferies Report
Bitcoin miners saw a slight recovery in June, according to a Monday research report from investment bank Jefferies. Bitcoin’s price increased by 2%, and the total Bitcoin hashrate decreased by 5%, offering miners some relief after a tough May, where profitability hit an all-time low.
Recovery Amidst Challenges
“June marked a period of modest recovery from the halving’s immediate impacts, most evident in May,” wrote analyst Jonathan Petersen. Bitcoin’s total hashrate, as of July 6, stood at 573 exahashes per second (EH/s). Hashrate, a proxy for competition, significantly affects mining profitability.
The halving event on April 19 reduced the BTC reward per block from 6.25 BTC to 3.125 BTC, contributing to a significant drop in mining profitability. However, the reduction in competition allowed more efficient miners to increase their market share.
Performance of Public Miners
U.S.-listed public miners increased their output in June, capturing 20.8% of the network share, up from 19.1% in May. Marathon Digital (MARA), the largest miner, extracted 590 BTC in June, a 4% decrease from May. CleanSpark (CLSK) saw a 7% increase, extracting 445 BTC.
The report also noted a trend among mining companies diversifying into high-performance computing to capitalize on the demand for artificial intelligence and cloud computing infrastructure.
Ethereum’s Struggles Continue: Could ETF Launch Reverse the Trend?
June 2024 was challenging for Ethereum, with its price declining 10.4% from $3,803 to $3,406. Concerns over a potential Bitcoin price drop and declining institutional investment contributed to the downward pressure.
Key Developments in June
- Price Movement: ETH’s price fluctuated significantly, influenced by macroeconomic conditions, lack of institutional demand, and regulatory uncertainty. The anticipated launch of spot Ethereum exchange-traded funds (ETFs) was delayed by the SEC, further dampening sentiment.
- Network Activity: Daily active addresses increased from 384.2k to 466.6k in June, with a peak of 610.8k on June 22. However, new address creation decreased by 14.8%. Ethereum’s total value locked (TVL) dropped 13% from $66.9 billion to $58.3 billion.
- Transaction Fees and Supply: Transaction fees reached multi-year lows due to a shift to Layer 2 networks. The EIP-4844 upgrade reduced costs but also decreased ETH burned on the mainnet, impacting future inflation.
ETF Launch and Market Expectations
The SEC approved 19b-4 filings to list spot Ethereum ETFs on May 23, but trading cannot commence until S-1 registration statements are approved. This delay pushed the potential launch to mid-to-late July. Analysts remain optimistic, predicting substantial capital inflows and a potential price increase for ETH.
VanEck’s analysts have raised their 2030 price prediction for ETH to $22,000, citing the impact of Ethereum ETF news and advancements in scaling technology. Despite short-term concerns, the long-term outlook remains positive, with predictions that ETH could outperform Bitcoin post-ETF launch.
Mixed Signals in DeFi and NFTs
Ethereum maintains its lead in DEX trading volume but faces increasing competition from blockchains like Solana and BNB Chain. Global NFT sales volume on Ethereum declined by 17% in June, with the number of daily NFT sellers reaching its lowest level since June 2021.
The rise of alternative blockchains with lower transaction fees poses a significant challenge to Ethereum’s dominance. While blue-chip NFT collections remain on Ethereum, the overall decline in trading activity suggests a shifting landscape.
