Bitcoin smashed through $11K this week, and Nisa asked James Bennett of ByteTree what he thinks about network demand.
(41:11) “We saw really low volatility in the lead up to this breakout. I think we were down below 25% annualized volatility, which for bitcoin is super low. And during that time, we were seeing network demand steadily rising. So we had fees increasing, we had velocity increasing, we also saw spend increasing. And we had from ByteTree, four out of the six indicators we usually track were on. And we saw this break to the upside, and it’s been extremely exciting to see that play out over the last few days,” said Bennett.
Nisa points out that miner revenue is close to $10 million per day. Bennett said it’s looking “super healthy,” adding:
(42:06) “Seeing their revenues increased is actually really bullish for the long-term health of this industry and specifically the Bitcoin network. They now make up to 12% of the total revenue, so 12% of revenues come through fees, which is one of the highest levels we’ve seen and the uptrend is steadily increasing…Lighting is actually also at an all time high; so the total value of bitcoin locked in the Lightning channel is at an all time high. That basically means people are able to pay more fees on the Bitcoin network.”
There are so many different things driving the BTC price.
(44:25) ”You’ve got Grayscale on the one hand that’s buying up pretty much all of the new coins that were mined in Q2 of this year for institutional demand then leads to retail flows. Of course the inflation hedge is real. So we’ve seen tech stocks dropping off last week, after a magnificent bull run and strong recovery off the back of the COVID liquidity crunch in March. Bitcoin’s held its own against falling tech stocks. So for sure in the macro environment that’s playing out. And when you look on that buy side of institutional and retail, it’s playing out. And then when you look at the actual use of the network….and network demand, it’s increasing. And so all of these different things are contributing to upward momentum that we’re seeing right now in bitcoin,” said Bennett.