BTC Price Jumps to $13,570 While Bitcoin Miner Profits Increase as Fees Hits 28-Month High
For the past week, Bitcoin's price continues to trade between the $14,000-$13,000 range, unable to break above the important $14k level, a good break above which will push it to all-time highs.
However, these recent moves by BTC have been in the complete opposite direction of the US equity market, especially the blast through the $12k and then the first test of $14k.
Ever since the multi-asset sell-off in mid-March, Bitcoin has been moving in-line with the S&P 500.
Although it is no longer the case, “if we zoom out from the start of the pandemic and measure from the depths of despair until today, we can see that the direction is the same, but the actual percentage performance is vastly different,” noted analyst Mati Greenspan.
But the data is still limited, and with the macroeconomic factors of US presidential elections, the interest rate virtually at zero, money printing spelling positive for both stock and BTC, they are to move in the same direction but at “a vastly different speed.”
At the time of writing, BTC/USD has been trading around $13,540 in the green while managing over $1.76 billion in daily trading volume.
As BTC price remains strong, bitcoin mining profitability has also increased. The higher bitcoin price, a rise of 30% over the past month, also increased the profit margins for miners for a period of time, until this past week, according to TradeBlock.
Last week, the bitcoin network hashrate reached a new all-time high as miners dedicated more and more resources to mine BTC as its price rose. But after the hash rate reached record levels, mining margins compressed as mining costs increased while the market price of BTC nearly remained constant.
This resulted in a decline in the network hash rate, occasionally falling below 100 exahash per second, a value not seen since June. As such, mining profit/loss over this period has also delineated.
However, the mining difficulty adjustment of -16.05% that occurred today will again make bitcoin production easier.
— f2pool (@f2pool_official) November 2, 2020
The total volume transacted on-chain for those transactions greater than $100,000 has also been growing consistently in 2020, last month. It reached a yearly high of $50.41 billion, representing 96% of the total daily volume, supporting institutional adoption premise, as per IntoTheBlock.
With this much activity, the fees are expected to increase as on-chain analyst Willy Woo said, “I'm looking forward to Bitcoin fees increasing on the base chain. It is very directly linked to demand, and increases its store of value properties by making Bitcoin harder to attack; especially as block reward reduces in the future.”
The Fee Ratio Multiple (FRM) has also dropped to its lowest level since January 2018. Linked to demand and caused by higher transaction fees, a low value for FRM also means “increased network security, especially as block rewards decrease over time” noted Glassnode.