Coinbase Weekly Report: Bitcoin Halving Effect

原文标题：Weekly: The Halving Effect

原文作者：David Han

原文来源：coinbase

Compiler: Lynn, Mars Finance

• The 2024 Bitcoin halving takes effect on April 20, with the fixed block reward reduced from 6.25 BTC to 3.125 BTC.
• We believe that rune-driven transaction fee increases and the increase in BTC in Q1 2024 are likely to support continued growth in network hashrate for some time at current price levels.
• At the same time, the Bitcoin Layer 2 (L2) ecosystem continues to expand, with multiple mainnets planned to be launched in the coming months. While we believe there are still many technical and transparency challenges, this could be a game-changer for Bitcoin.

Market Perspectives

The 2024 Bitcoin halving takes effect on April 20, reducing the fixed block reward from 6.25 BTC to 3.125 BTC and reducing Bitcoin's daily inflation from $60 million to $30 million (67,000 BTC). At the same time, the coordinated release of Runes on Bitcoin (an alternative to Ordinals and the BRC-20 protocol) led to a spike in demand for block space. On April 20, a total of 1,257 BTC in transaction fees were spent, second only to the 1,495 BTC spent on December 22, 2017. In U.S. dollar terms, total transaction fees on April 20 hit an all-time high of $81 million.

Although there is some uncertainty about miner profitability and sustainable hashrate growth due to the reduction in block rewards, we believe that the relative increase in variable transaction fees (coupled with the rise in BTC in Q1 2024) is likely to support continued growth in the network's hashrate in the short to medium term. After the halving, transaction fees already accounted for 35-45% of miners' total revenue, initially soaring to 75% on day one. This reflects the previous surge in the cost of ordinary medals in May and December 2023.

BTC has appreciated by about 50% since our January 30, 2024 note on Bitcoin miners (released at $43,000 in BTC). At the same time, Bitcoin's network hash rate has only increased by about 10% (from ~560EH/s to ~630EH/s). Our calculations show that the current network hashrate is about 630 EH/s, which is 11% of the network's theoretical maximum hashrate, well below the 25% soft cap observed during the last halving and the recent bear market.

Even if rune-driven activity subsides and transaction fees revert back to 5% of miners' gross revenue (as it did 1-2 months after Ordinals triggered a surge in demand), the network will still only be able to achieve around 17% of its theoretical maximum hash rate at the current Bitcoin price. This shows us that, all else being equal, miners can continue to increase the hashrate and profit from it. In fact, Bitmain's Antminer S21, the most advanced mining machine at the moment, has been, and the next-generation machine, the S21 Pro, which further increases mining efficiency from 17.5 J/TH to 15 J/TH, is scheduled to ship in the third quarter of 2024.

More broadly, the Bitcoin Layer 2 (L2) ecosystem also continues to expand, with multiple mainnets expected to launch in the coming months. This could be another source of demand for Bitcoin transactions, especially if runes or BRC-20s minted on the base layer are widely used in these L2s. It is unclear how assets minted on one Bitcoin L2 will be canonically bridged to another without leveraging native BTC assets. In the case of Ethereum, many of the tokens on its L2 (from stablecoins to DeFi governance tokens) were minted on the Ethereum base layer before the bridge. The governance and core features of major DeFi protocols such as Uniswap, Maker, and Aave are also still present on the Ethereum mainnet.

That said, Bitcoin lacks the same underlying smart contract functionality as Ethereum, so its ecosystem may not be equally anchored to the base layer. This could result in more decentralized liquidity between Bitcoin L2 than on Ethereum L2. Bitcoin's lack of smart contracts (or sufficiently flexible OP code) could also have broader implications for its secure implementation of L2. With a few exceptions, core rollup properties, such as the ability to enforce the inclusion of transactions through the base layer, seem impossible under many chain architectures labeled Bitcoin L2.

The fact that the term "L2" is used relatively loosely in the Bitcoin ecosystem means that many networks labeled as L2 are actually closer to the usual sidechains of the Ethereum community. This broad label can make it more challenging for users to make various security trade-offs between chains, especially given the current lack of community-driven sources of transparency, such as Bitcoin's L2. In addition, changes in the L2 bridge design have opened up new surface areas for attacks. Bridges have historically been the target of the largest hacks in the space, and the relative nascentness of Bitcoin's L2 design means that bridges are far from risk-free attempts.

However, despite the technical challenges, we believe that Bitcoin L2 represents an exciting key development in the space at a time when Lightning Network capacity and WBTC levels on Ethereum are stagnant (see Figure 3). Historically, BTC holders have been largely marginalized when new use cases and other innovations emerge on other chains, with WBTC being the primary access vector for DeFi and the Lightning Network being the primary means of low-fee transactions.

The advent of Ordinals, BRC-20, and now Runes, and the enthusiasm of the people shows that there is indeed a great demand for BTC holders who want to do more with BTC on-chain than just "hold" it. In our view, the widespread interest in these solutions reflects the Bitcoin community's eagerness to leverage its holdings as part of a more complete computing environment. Importantly, these developments are likely to further open up DeFi and other blockchain advancements to the largest source of on-chain capital – Bitcoin. That said, as security and design trade-offs become clearer, we expect it will be a few months before long-term leaders emerge.

Overview of Crypto vs. Tradition

(As of April 25 at 4 p.m. ET)

Source: Bloomberg

Coinbase 交易所和 CES 见解

The highly anticipated Bitcoin halving has little impact on price action. We saw some de-risking of Bitcoin positions ahead of the event, but the feared sell-off news drop never materialized. We think this may be because the positioning has been cleaned up. The funding rate has fallen to near its lowest level year-to-date, indicating that there are fewer long positions. ETF flows have also slowed, with only $28 million flowing into the product over the past week. Traders are watching to see if the market is able to sustain its current levels with lower trading volumes. If you can, this could be seen as a constructive sign as we move into late spring and early summer.

Coinbase Platform Trading Volume (USD)

Trading volume by asset on the Coinbase platform

Financing interest rate

Notable cryptocurrency news

Institutional

• BlackRock Spot Bitcoin ETF Joins Exclusive Club After 70 Days of Straight Growth ( )
• Hong Kong Bitcoin and Ether ETFs Officially Approved to Start Trading on April 30 ()

stipulate

• Crypto lobbyists sue SEC over "trader" definition ( )
• Ripple objected to the SEC's proposed $2 billion fine, calling it "evidence of its continued intimidation" ( )

general

• Bitcoin halving shows new users that "code is ultimately law" in crypto ()
• Bitcoin and Bitcoin Cash Payment Update for Mt. Gox Creditor Reporting Claims System ( )

Coinbase

• Coinbase beats traditional payment methods by $15 million in NBA ad spend ()

Perspectives from all over the world

Europe

Tether Enters Strategic Partnership with Fuze to Strengthen Digital Asset Education in Turkey and the Middle East ( )

Activists demand Swiss National Bank to add Bitcoin to its reserves ( )

Asia

Hong Kong "Physical" Spot Bitcoin and Ether ETFs to Start Trading on April 30 ( )

Thai authorities decide to block unauthorized cryptocurrency platforms in order to improve the efficiency of law enforcement to tackle cybercrime ( )

New Zealand CBDC Roadmap Enters Design Consultation Phase ( )

Japan's ruling Liberal Democratic Party released a 2024 Web3 white paper, calling for Japan to become the center of Web3 ()

The week ahead