Bitcoin Has Slumped Since April, Here's Why!

Bitcoin has slumped since April (Photo; Doc. Freepic)

JAKARTA - Bitcoin has experienced a significant decline in demand since April 2024. This phenomenon has attracted the attention of many parties, especially since Bitcoin is known as one of the most popular and highly valued digital assets. Based on a report from data analysis firm CryptoQuant released on August 20, demand for Bitcoin has slumped from the growth of 496,000 Bitcoin in April to the current negative growth of 25,000 BTC.

The decline in demand was measured by calculating the difference between Bitcoin's total daily block subsidies and a change in the number of Bitcoins that remained immobile for one year or more. This decline is thought to have contributed to a decline in Bitcoin prices, which fell from around US$70,000 (Rp1.05 billion) in April to around US$51,000 (Rp788 million) in early August. Despite this, Bitcoin still recorded a 33% return so far this year.

Reporting from Cointelegraph, one of the main factors affecting the reduction in Bitcoin demand is the decline in ETF purchases in the United States. The volume of ETF purchases has dropped dramatically, from 12,000 BTC in March to an average of only 1,300 BTC between August 11 and August 17. This decrease in purchases helped reduce the price of Bitcoin in the market.

Bitcoin price premiums in Coinbase are one of the largest exchanges in the United States to reach 0.25% in early 2024 following the launch of the ETF, now dropping to 0.01%, which further reinforces the decline in Bitcoin demand in the country. "Recovery in the purchase of the spot ETF is essential to boost Bitcoin demand as a whole, potentially triggering a significant price increase," the analysis notes.

On the other hand, despite the negative trend among institutions, Bitcoin permanent holders are actually taking advantage of this price drop to increase their holdings. The total amount of Bitcoin owned by permanent holders addresses that have never sold Bitcoin increased at the highest monthly level, reaching 391,000 BTC. Demands from permanent holders increased faster than in the first quarter of 2024, when the price of Bitcoin exceeded 70,000 US Dollars (Rp1.05 billion), the report said.

Meanwhile, paus' addresses that have 1,000 to 10,000 coins actually reduce their total holdings. According to the analysis, a 30-day change in whale ownership fell from 6% in February, which is the fastest rate since February 2019, to only 1% at the moment. Monthly growth of more than 3% in whale ownership typically correlates with the increase in Bitcoin prices.

With the increasingly complex situation in the Bitcoin market, various factors, including the policy of purchasing ETFs and the activities of the whales, will continue to be the main determinant of the direction of this crypto price movement going forward.