Bitcoin’s Turbulent July: From Soaring Highs to Plummeting Lows – What’s Next?
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Bitcoin experienced high volatility in July, with prices surging to new highs before plummeting dramatically. This report delves into the key factors driving these price swings and explores other significant developments within the Bitcoin ecosystem during the month.
Key takeaways:
- Bitcoin experienced significant volatility, starting at $63,530 and reaching a high of $69,697 before plummeting to $51,267 in early August. This volatility was driven by various factors, including Ether ETF launches, regulatory news, and the global stock market crash.
- July saw significant inflows into Bitcoin ETFs, with BlackRock’s iShares Bitcoin Trust (IBIT) receiving a peak inflow of $526.7 million on July 22.
- Bitcoin network activity surged in July. Transactions climbed 13% to 19.51 million, while the number of active wallets rose 12% to 22.43 million. New Bitcoin addresses grew 13% to 9.02 million.
- Bitcoin miner revenue dropped from $1.93 billion in March to $951 million in July, reflecting ongoing challenges in the mining sector. Network difficulty also increased by over 10.5% on August 1, reaching an all-time high of 90.66 trillion.
- Despite the growth of Layer 2 solutions, Bitcoin itself maintained dominance, processing over 90% of all transactions on the Bitcoin network in July.
- Bitcoin-based NFT sales plummeted nearly 50% from the previous month, with July sales at $77.3 million, a sharp decline from the April peak of $708 million.
What You’ll Find in This July Bitcoin Analysis:
- What is Bitcoin?
- Bitcoin Price Rollercoaster: July Highs and Early August Lows
- Booming On-Chain Activity Meets Declining TVL
- Institutional Interest in Bitcoin ETFs Surges
- Bitcoin Ecosystem Sees Broader Utility and Investment Growth
- Bitcoin Mining in Flux: Network Difficulty, New Miner Strategies
- Zero-Knowledge Progress Fuels Bitcoin DeFi Innovation
- Bitcoin Ordinals Sales Plummet to New Lows
- Bitcoin’s Path Ahead: Balancing Institutional Interest with Market and Tech Hurdles
What Is Bitcoin?
Bitcoin (BTC) is a decentralized cryptocurrency created to function as a digital currency and means of payment that operates independently of any single individual, organization, or authority, eliminating the need for third-party intermediaries in financial transactions. It is allocated to blockchain miners to validate transactions and can be purchased through various exchanges.
Unveiled to the public in 2009 by an enigmatic developer or group known as Satoshi Nakamoto, Bitcoin has become the most widely recognized cryptocurrency in the world. Its success has spurred the creation of numerous other cryptocurrencies.
Bitcoin Price Rollercoaster: July Highs and Early August Lows
Bitcoin (BTC) started July at $63,530. On July 5, the price dipped to $54,420 (-14%), and one of the biggest catalysts for the decline was the sale of large tranches of BTC ($3 billion) by the German state of Saxony between June 19 and July 12 (and reactions on social media on this news). Additional factors contributing to the price slump include the impending creditor repayment by the bankrupt exchange Mt. Gox and the slowdown in Bitcoin exchange-traded fund (ETF) inflows.
Later in July, Bitcoin rallied significantly, reaching $69,697 on July 29, a 28% increase and the highest the cryptocurrency has traded since June 13, when it hit $70,000 but found resistance and pulled back. The month ended at a respectable $66,614.
The price increase can be attributed to the successful launch of Ether ETFs on July 23, and former U.S. President Donald Trump reiterating his support for the cryptocurrency at the Bitcoin 2024 conference in Nashville on July 27. The Republican Party presidential nominee pledged that if elected in November, he would create a “strategic Bitcoin reserve” and stop the U.S. from selling its existing BTC holdings. Trump also claimed that he would fire Securities and Exchange Commission (SEC) Chair Gary Gensler.
However, after Trump’s supportive speech and U.S. President Joe Biden’s exit from the presidential elections, August started with a dramatic downturn for Bitcoin, as the cryptocurrency plummeted to a six-month low of $51,267. This represents a 23% decline from its July peak. The broader cryptocurrency market suffered a simultaneous collapse, losing a colossal $510 billion in total market capitalization. The sell-off was so severe that over 60% of the top 50 cryptocurrencies erased their 2024 gains.
After Black Monday, 60% of coins in the top 50 have removed all profit since the beginning of 2024 and even get losses.
Bad Performance % YTD 🩸$XRP -16.76, $ADA -44.45, $AVAX -45.92, $DOT -46.41, $LINK -32.94, $LTC -19.90, $MATIC -57.40, $ICP -43.68, $UNI -20.15, $XMR -8.77,… pic.twitter.com/QtkGkNePOA
— binhdangg (@binhdangg1) August 6, 2024
Factors contributing to the downturn were various negative macroeconomic factors, like an interest rate hike in Japan and the stock market crash, worsening U.S. employment data, and geopolitical tensions in the Middle East.
As of Aug. 12, Bitcoin recovered to $59,200, sparking optimism among Bitcoin analysts, who now believe in BTC’s potential to recover to higher levels.
CryptoQuant CEO Ki Young Ju expressed confidence in Bitcoin’s ability to reach a new all-time high if it maintains a price above $45,000.
As long as the #Bitcoin price stays above $45K, it could break its all-time high again within a year, imo.
Some indicators are showing bearish signals. However, they could still recover with a rebound, so we need to watch if it stays at this level for a week or two.
If it… https://t.co/FnqafcQcjp pic.twitter.com/fJiM2btQeF
— Ki Young Ju (@ki_young_ju) August 6, 2024
On Aug. 5, Bitcoin’s dominance surged to 59.63% but decreased to 48.46% on Aug. 8. The total crypto market value shrank from approximately $2.57 trillion on July 27 to approximately $2.01 trillion on Aug. 5. This sharp decline was accompanied by a broader downturn in both the altcoin and stock markets. At the time of writing, the total cryptocurrency market cap has recovered somewhat and reached $2.22 trillion.
VanEck Forecasts Bitcoin as Cornerstone of Global Trade and Central Banking
Investment management firm VanEck also predicts a $61 trillion market capitalization for Bitcoin by 2050, valuing each coin at approximately $2.9 million. This bullish forecast is driven by the expectation of Bitcoin becoming a cornerstone asset for global trade and central bank reserves.
According to VanEck’s July 24 report, Bitcoin could potentially settle 10% of worldwide international trade and 5% of domestic trade by 2050. Moreover, central banks might allocate 2.5% of their holdings to the cryptocurrency.
“We theorize that the chief driver of this shift will be declines in the relative global GDP of current economic leaders such as the U.S., the EU, the UK, and Japan. The changes will be further catalyzed by diminishing confidence in current reserve currencies as long-term stores of value due to unrestrained deficit spending and the short-sighted geopolitical decisions by the issuing nations. Notably, concerns about the property rights guaranteed by Western monetary and financial systems, particularly in the United States, are growing.”
VanEck’s analysts Matthew Sigel and Patrick Bush also anticipate a significant role for Bitcoin’s Layer 2 solutions, estimating their combined market value at around $7.6 trillion by 2050. These scaling technologies are seen as crucial to overcoming Bitcoin’s current scalability limitations and facilitating widespread adoption.
Booming On-Chain Activity Meets Declining TVL
Bitcoin network activity surged in July, with monthly transactions increasing by 13% compared to June, reaching a total of 19.51 million. The network experienced two peak periods in July, with weekly transaction volumes reaching 720,4k and 718,3k on July 5 and July 25, respectively. However, a significant decline followed, with weekly transaction numbers dropping by 33.5% to 477.2 by Aug. 8.
The number of active Bitcoin wallets experienced high volatility in July, with weekly fluctuations alongside an overall monthly growth. The 7-day moving average (7DMA) peaked at 755k on July 20, ahead of the Ether ETF launches and Bitcoin 2024 conference, before dipping to 695k by July 28. This metric rebounded to 751k on Aug. 6 following the broader market downturn. Overall, the total monthly number of active Bitcoin wallets increased by 12% in July, reaching 22.43 million.
The monthly number of new Bitcoin addresses also experienced growth in July, rising 13% from 7.97 million to 9.02 million. This metric reached its weekly peak on July 3, with a 7DMA of 329.8k new addresses, before dipping to a low of 270.8k on July 14. Subsequently, there was an upward trend until a slight decline emerged after Aug. 2, coinciding with the Japan stock market crash.
While Bitcoin’s total value locked (TVL) reached $989.2 billion on July 1, it continued to decline throughout the month. By July 31, the TVL had fallen to $724 million, a 26.8% drop in just 30 days. On Aug. 5, the value even dropped to $538.9 million.
Bitcoin futures’ open interest rose throughout July, reaching its monthly high of $37.49 billion across all exchanges on July 29, indicating growing investor demand for the world’s largest cryptocurrency.
However, following the global stock market crash, this figure fell to a low of $26.65 billion on Aug. 6, marking one of the largest negative spikes in open interest in the past two years.
On July 19, Bitcoin retail interest hit its lowest point in three years.
#Bitcoin retail investor demand is at a 3-year low.
It's measured by the 30-day change in total transfer volume for transactions under $10K.
h/t @AxelAdlerJr pic.twitter.com/GnosvQUa7G
— Ki Young Ju (@ki_young_ju) July 18, 2024
While large-scale Bitcoin purchases by institutional investors have become more common, many analysts argue that substantial price increases for Bitcoin will only occur once there is a significant uptick in interest from individual investors.
The real bull run typically begins with massive buying volume driven by retail investors.
And we have not yet seen this volume from retail investors. #BTC #Bitcoin pic.twitter.com/ujaJYSzYTM
— 우민규 (Woominkyu) (@Woo_Minkyu) July 17, 2024
CryptoQuant founder Ki Young Ju observed a surge in over-the-counter Bitcoin trading, indicating potential institutional accumulation. In a July 17 X post, Ju reported that whale wallets holding over 1,000 Bitcoin, including those associated with spot ETFs and custodians, have accumulated 1.45 million Bitcoin this year, bringing their total holdings to 1.8 million Bitcoin. This represents approximately 9% of the circulating Bitcoin supply. Ju highlighted that the weekly inflow to these whale entities now surpasses the total Bitcoin they acquired in 2021.
#Bitcoin OTC markets are overwhelming CEX markets.
Whale wallets (>1K BTC), including spot ETFs and custodial wallets, added 1.45M BTC this year, totaling 1.8M BTC.
In 2021, about 70K BTC flowed in over the year; now, it's 100K BTC "weekly." I repeat. 100K BTC weekly. pic.twitter.com/YJPJpMtMPL
— Ki Young Ju (@ki_young_ju) July 17, 2024
Although Blockchain.com’s data shows significant daily volatility in the total USD trading volume on the major Bitcoin exchanges, it remains relatively stable in its ups and downs. However, this figure spiked to over $1.14 billion on Aug. 6 (an increase of 317.5% in 24 hours). This spike in trading volume amidst a global stock market crash highlights the sensitivity of the crypto market to both regulatory and macroeconomic factors.
Institutional Interest in Bitcoin ETFs Surges
July saw billions of dollars of net inflows into spot Bitcoin ETFs. Starting from July 5, flows remained positive, peaking on July 22 with a single-day net inflow of 530.2 million dollars. BlackRock’s iShares Bitcoin Trust (IBIT) recorded its highest net inflow since March 13, totaling $526.7 million on that day. Then Bitcoin ETFs started to experience outflows, mostly due to the Grayscale Bitcoin Trust ETF (GBTC).
Jeroen Blockland, founder of Blockland Smart Asset Fund, described the inflows as “baffling,” noting they surpass those of the “magnificent seven” stocks in 2024. This is a reference to the 1960s American Western film “The Magnificent Seven”, but in this context, it refers to Microsoft, Apple, Tesla, Amazon, Meta, Alphabet, and Nvidia rather than cowboys.
The inflows into the 'new' spot #Bitcoin ETFs are baffling. #Blackrock's iShares Bitcoin Trust has accumulated USD 19 billion in inflows this year. This is more than Invesco's Nasdaq 100 ETF, including the hyped Magnificent 7 stocks and the #ArtificialIntelligence boom.
In… pic.twitter.com/yF5CBRnEE3— jeroen blokland (@jsblokland) July 23, 2024
On Aug. 9, Bitcoin ETFs experienced a net outflow of $89.7 million, according to data from Farside. Grayscale’s GBTC led with a significant daily outflow of $77 million (on Aug. 8 this number was even 182.9 million), bringing its total historical outflow to $19.45 billion. Its new Bitcoin Mini Trust ETF (BTC), approved by the SEC on July 26 and trading-ready since July 31, bucked the trend with a $15.6 million inflow, totaling $266 million. BlackRock’s IBIT also saw inflows, gaining $9.6 million.
Despite these mixed flows, the total net asset value of Bitcoin ETFs stands at $55.1 billion (as of Aug. 9). The ETFs currently represent 4.6% of Bitcoin’s total market value, with a cumulative net inflow of $17.3 billion since inception.
BlackRock’s IBIT tops the leaderboard with the highest investment, currently holding $20.3 million in Bitcoin and capturing over 50% of the market share.
July 2024 marked a period of heightened interest in Bitcoin ETFs among institutional investors, with several key events demonstrating a growing appetite for the asset class.
Fidelity Brings Bitcoin ETP to London
On July 31, Fidelity International announced that its Bitcoin exchange-traded product (ETP) is now available on the London Stock Exchange. However, this investment vehicle is exclusively accessible to professional investors.
The launch of the Fidelity Physical Bitcoin ETP (FBTC) follows the UK Financial Conduct Authority’s decision in late May to approve Bitcoin-backed exchange-traded notes for professional investors. This regulatory green light has paved the way for other firms like 21Shares, WisdomTree, and Global X to introduce similar products in the UK market.
Coinbase Partners With DigitalX in Australia
Coinbase has further solidified its position in the Bitcoin ETF market by partnering with Australia’s asset manager DigitalX. The exchange will provide custody and trading services for DigitalX’s spot Bitcoin ETF, BTXX, which launched on July 12.
DigitalX is the second company to offer a Bitcoin ETF on the Australian Securities Exchange (ASX), following the launch of the VanEck Bitcoin ETF (VBTC) on June 20.
Since the approval of the first spot Bitcoin ETF in the U.S. in Jan. 2024, Coinbase has been selected as a custody partner for ten Bitcoin ETFs and eight of the nine Ether ETFs. This includes high-profile funds such as the Grayscale Bitcoin Trust ETF (GBTC) and BlackRock’s iShares Bitcoin Trust (IBIT).
Hashdex Takes Another Step Towards Bitcoin and Ether ETF
Digital asset manager Hashdex had made progress in its bid to launch a combined Bitcoin and Ether ETF in the U.S. On June 24, the firm filed an S-1 registration statement for its Hashdex Nasdaq Crypto Index US ETF, designed to track the Nasdaq Crypto Index. While currently focused on Bitcoin and Ether, the fund’s structure suggests potential inclusion of additional crypto assets in the future.
Michigan Pension Fund Invests in Bitcoin ETF
The State of Michigan Retirement System disclosed owning 110,000 shares of the ARK 21Shares Bitcoin ETF, valued at approximately $6.6 million, in a June 30 SEC filing.
This move positions Michigan as the third U.S. state to allocate pension funds to Bitcoin through ETFs since their approval in January. In May, the State of Wisconsin Investment Board invested $164 million in Bitcoin ETFs, while Jersey City Mayor Steven Fulop hinted at a 2% investment in Bitcoin ETFs by the city’s pension fund on July 25.
Capula Invests Nearly $500M in Bitcoin ETFs
Capula Management, Europe’s fourth-largest hedge fund, disclosed a nearly $500 million investment in Bitcoin ETFs. This significant allocation underscores the growing confidence of traditional financial institutions in Bitcoin as a viable asset class.
Bitcoin Opens Doors to EU Citizenship
Bitcoin investments can also unlock doors to EU citizenship. On July 23, Alessandro Palombo, co-founder and CEO of Unbound Fund, announced a new pathway to Portuguese citizenship. By investing over €500,000 (approximately $546,000) in the fund, which indirectly holds Bitcoin, investors can qualify for Portugal’s golden visa program.
Unbound Fund itself adopts a passive investment strategy, focusing solely on Bitcoin holdings and utilizing BlackRock ETFs for operational efficiency.
Hold #Bitcoin and acquire Portuguese/EU Citizenship
It is now possible to acquire Portuguese/EU citizenship by indirectly holding #Bitcoin worth €500K.
I am excited to introduce https://t.co/DgqCyGTfgv
Unbound Fund is the first Golden Visa eligible fund that gives you… pic.twitter.com/SVJjjg8x70
— Alessandro Palombo (@0x_ale) July 23, 2024
Bitcoin Ecosystem Sees Broader Utility and Investment Growth
July 2024 wasn’t just about Bitcoin ETF investments. The month saw new developments within the Bitcoin ecosystem, pushing its boundaries beyond traditional finance.
BitGo Adds Stacks Support
Beyond investments, July witnessed efforts to broaden Bitcoin’s utility. On July 19, digital asset service provider BitGo launched support for the Stacks blockchain, a Bitcoin-based Layer 2 network, opening up new earning opportunities for its users. Through a process known as “stacking,” holders of the Stacks token STX can now generate native Bitcoin rewards directly within their BitGo wallets.
The leading regulated custody provider, @BitGo, is integrating @Stacks.
The integration includes:
• Supporting sBTC
• Joining the Signer network
• Supporting SIP-10 tokens
• Enable STX stacking from their walletGreat step towards institutional adoption of Bitcoin L2s.
— Stacks Foundation 🟧 (@StacksOrg) July 19, 2024
Meanwhile, regulatory clarity emerged with the SEC’s decision to drop its three-year investigation into Hiro Systems, the developer of Stacks. This positive development could foster further innovation within the Bitcoin ecosystem.
Bitcoin Rewards App Fold Goes Public
Bitcoin rewards app Fold is set to become a publicly traded company on the Nasdaq. The company announced on July 24 plans to merge with special purpose acquisition company FTAC Emerald Acquisition in a deal valuing Fold at $365 million. This move marks a significant step for Fold, allowing it to access public markets and potentially expand its operations.
Xapo Bank Brings Bitcoin Banking to the UK
Gibraltar-based Xapo Bank expanded its services to the United Kingdom, offering interest-bearing accounts for both U.S. dollars and Bitcoin. Customers can send and receive funds up to £1 million ($1.26 million) within the U.K. and earn a competitive 1% interest on their Bitcoin holdings without requiring staking or locking funds.
Bitcoin-Based Solutions Secure New Investments
Bitcoin Layer 2 solution Bitlayer Labs announced on July 23 that it raised $11 million in Series A funding. Led by industry giants Franklin Templeton and ABCDE, the round brings Bitlayer’s total funding to $16 million. The fresh capital will be used to expand the platform and accelerate its growth.
Bitcoin scaling network Mezo also secured $7.5 million on July 26 in a funding round led by Ledger Cathay Fund. The investment will support Mezo’s ongoing development and expansion. Other notable investors participating in the round include ArkStream Capital, Aquarius Fund, Flowdesk, GSR, Origin Protocol, and Mantle EcoFund.
Meanwhile, Bima Labs, the company behind the Bitcoin-pegged stablecoin USDB, also raised $2.25 million in a seed funding round. The investment round was led by Portal Ventures, with participation from various investors, including Draper Goren Blockchain, Sats Ventures, and Luxor Technology.
Founded earlier this year, Bima Labs has quickly attracted attention from the crypto community. The newly acquired funds will be used to support the development and launch of the USDB stablecoin.
Introducing Bima – the universal omni-chain stable on Bitcoin. We're excited to announce our $2.5m raise from@PortalVentures @DGBventures @TimDraper @AlonGoren @bleznak @Deltabc_fund @sats_ventures @LuxorTechnology and others.
Read on to learn more about our vision, and USBD: pic.twitter.com/twVCKuKNOT
— BIMA (@bimabtc) July 15, 2024
Bitcoin Mining in Flux: Network Difficulty, New Miner Strategies
Bitcoin miner revenue has experienced a notable decline in recent months. In March, miners generated a robust $1.93 billion, followed by a slight decrease to $1.79 billion in April. However, a dramatic downturn occurred in May, with revenue plummeting to $964 million (-46%), a direct consequence of the Bitcoin halving. This downward trend persisted in June and July, with minimal changes to $963 million and $951 million, respectively. The consistent decrease in earnings highlights the challenges faced by miners in the current market conditions.
In July, the Bitcoin network also experienced a decline in difficulty to 79.49 trillion, a measure of how difficult it is to mine a new block for the blockchain, providing a temporary reprieve for miners. This period allowed some miners (MARA, Bitfarms, Riot) to increase their profitability due to the reduced computational power required for transaction validation.
However, starting on Aug. 1, the network difficulty jumped by over 10.5%. With the network difficulty now at an all-time high of 90.66 trillion, miners will need to adapt to maintain their operations efficiently.
In general, Bitcoin miners continue to hold their Bitcoin rather than selling them, according to the latest data from CryptoQuant. This trend continued in July, as evidenced by an increase in the 7DMA of average coin inflow into affiliated miners’ wallets.
The miners’ decision to hold their Bitcoin suggests a bullish sentiment about the cryptocurrency’s future price. It could also be a strategic move to strengthen their balance sheets amid market volatility and the current declining profitability of miners.
Miners Holding Strong, Despite Challenges
Leading Bitcoin miners reported strong performance in July, with increased Bitcoin production and growing holdings.
The world’s largest Bitcoin miner MARA, recently rebranded from Marathon Digital, significantly increased its holdings in July. The company won 201 blocks in July, a 27% month-over-month increase, and produced 692 Bitcoin, a 17% month-over-month increase. Marathon Digital’s holdings increased to 20,818 Bitcoin, with total cash and Bitcoin amounting to $1.6 billion as of July 31.
Another Bitcoin mining firm, Bitfarms, also reported a significant 34% month-over-month increase in earnings for July. The company attributed this growth to expanded mining operations and fleet upgrades, which boosted its overall hashrate. Bitfarms generated 253 Bitcoin in July, equivalent to approximately $16.2 million based on current market prices. This represents a substantial increase compared to the 189 Bitcoin mined in June, valued at $12.1 million.
Meanwhile, Hut 8, one of North America’s largest Bitcoin miners, announced its production figures for July 2024 as well. The company mined 105 Bitcoin during the month, adding to its overall Bitcoin holdings. As of July 31, Hut 8’s balance sheet reflects a total of 9,102 Bitcoin. Additionally, Hut 8 plans to expand its operations with a new deal in West Texas – with 205 megawatts of immediately available power capacity and land.
Riot Platforms, a Bitcoin miner operating in central Texas and Kentucky, reported a net loss of $84.4 million in Q2 2024, compared to a net loss of $27.4 million in the same period last year. The increased loss was primarily due to the impact of the Bitcoin halving in April. However, in July, the company significantly increased its Bitcoin production by 45% compared to June, mining a total of 410 Bitcoin. This substantial growth was driven by the successful deployment of additional hash rate at the Corsicana facility.
Meanwhile, Riot made a strategic acquisition on July 23, acquiring Block Mining. This deal immediately boosted Riot’s hash rate by 1 EH/s and opened up new growth opportunities in Kentucky and other jurisdictions. The acquisition includes 60 MW of operational capacity with the potential to expand to over 300 MW.
Moreover, Riot further continues its attempt to take over Bitfarms as it purchased about 10.2 million more Bitfarms’ shares in July, a filing from July 31 shows.
Zero-Knowledge Progress Fuels Bitcoin DeFi Innovation
Despite being in its early stages, the Bitcoin DeFi ecosystem showcased notable progress in July. Key developments included breakthroughs in privacy technology, with platforms implementing zero-knowledge proofs to enhance user anonymity.
Bitcoin Maintains Transaction Dominance
Data from Dune Analytics reveals that despite the growth of Layer 2 protocols on the Bitcoin network, the original Bitcoin continues to outperform these solutions in terms of daily transaction volume.
While the Runes protocol briefly dominated Bitcoin’s network activity following its launch in April, processing over 50% of transactions over 13 days, its performance has since declined significantly. This suggests that while Layer 2 solutions offer potential benefits, they have yet to consistently surpass the main chain in terms of transaction throughput.
“Good old Bitcoin” still accounts for a significant portion of overall transactions. In July, Bitcoin processed over 90% of all transactions on the blockchain. On Aug. 6, Bitcoin reached 91.7% dominance, with Runes accounting for 4.3% of transactions, followed by BRC-20 and Ordinals at 3% and 2%, respectively.
Galaxy Research Casts Doubt on Bitcoin Layer 2 Sustainability
A recent Galaxy Research report from Aug. 2 raised concerns about the long-term viability of many Bitcoin Layer 2 scaling networks.
Despite the growing popularity of these solutions, the report highlights the significant costs associated with operating rollups, a common type of Layer 2 technology. According to the research, rollups must generate sufficient revenue from transaction fees to cover operational expenses and maintain security.
there are dozens of rollups being “built on bitcoin”
but only a small few will launch & survive on bitcoin
bitcoin doesn’t have enough blockspace for all of them, and the cost to post data will be much too expensive for most of them@hiroto_btc explains why in a new report pic.twitter.com/dKnDRDgjAO
— Alex Thorn (@intangiblecoins) August 2, 2024
StarkWare and BitcoinOS Verify First ZK Proofs on Bitcoin
Blockchain developer StarkWare made significant progress in Bitcoin scaling by successfully verifying the first zero-knowledge proof (ZK) on the network’s Signet testnet. This achievement, built upon the potential of the OP_CAT proposal, marks a crucial step towards developing scalable Layer 2 solutions for Bitcoin. BitcoinOS achieves breakthrough with first ZK proof on mainnet
BitcoinOS (BOS), a Bitcoin rollups protocol, is also on its way to improve Bitcoin’s scalability. On July 24, the platform successfully verified the first ZK proof on the Bitcoin mainnet,
Both breakthroughs open the door for increased functionality and scalability on the Bitcoin network, expanding its global payment potential.
Bitcoin Ordinals Sales Plummet to New Lows
The global NFT market continues its downward spiral, with July poised to record the lowest monthly sales volume since November 2023. According to CryptoSlam data, sales for digital collectibles in July have already fallen to 429.8 million, with daily volumes hovering below $14 million.
In terms of NFT sales volume by blockchain, Bitcoin ranked third in July, behind Ethereum and Solana.
Bitcoin-based NFTs experienced a sharp decline in sales volume during July, plummeting nearly 50% from the previous month. After reaching a staggering $708 million in April, sales volume has consistently dwindled, falling 147% in May and a further 147% in June. The July figure of $77.3 million represents an 815% drop from the April peak.
The data further revealed that the Bitcoin network attracted around 49.4k buyers and 35.6k sellers of NFTs during July. The number of NFT transactions on Bitcoin Ordinals reached more than 119.4k.
Only Bitcoin Puppets, a collection based on Bitcoin Ordinals, managed to maintain its position among the top 10 NFTs by trading volume in July. Despite generating over $8.9 million in sales within a month (as of July 31), the collection experienced a nearly 30% decline compared to the previous month.
Notable NFT launches in July:
- Rare Sads (July 3 – July 10): Rare Sads is a collection of 3,693 unique NFTs built on the Bitcoin Ordinal protocol. The collection plays on the idea of sadness and melancholy (‘Runes are sad’), using a minimalist aesthetic to convey emotions. The collection was launched on the Ordinal Genesis platform and is currently available for secondary trading on Magic Eden.
- Alien Ordinal Artifacts (July 3 – July 10): This is a collection of 300 unique, hand-drawn NFTs by popular artist Joey Mars, known for his psychedelic style, available on Magic Eden. The series features intricate, colorful designs with details and symbols deeply associated with Bitcoin and its passionate community – from the iconic orange “B” to cryptic references to legendary memes and characters.
- C.A.T., or Cats Against TradFi (July 11 – July 18). Featuring 2,200 unique cat-themed artworks, this NFT collection, available on Magic Eden, showcases a diverse artistic style, blending cartoonish and abstract elements. A common thread of rebellion against traditional finance (TradFi) runs throughout the collection, often conveyed through playful details within the artwork.
Bitcoin’s Path Ahead: Balancing Institutional Interest with Market and Tech Hurdles
July 2024 was a month of contrasting fortunes for Bitcoin. An initial surge, fueled by positive news like the launch of Ether ETFs and Trump’s endorsement, was abruptly halted by a market downturn in August. Despite this volatility, Bitcoin’s underlying network remained active with increased transaction volumes and new user addresses. Moreover, institutional investors showed growing interest in Bitcoin ETFs, injecting significant capital into the market.
Looking ahead, Bitcoin’s trajectory will likely be influenced by a complex interplay of factors. Regulatory clarity is essential, as clear and consistent rules can foster innovation while protecting investors. The continued appetite of institutional investors, particularly in light of recent ETF approvals, will also be crucial for Bitcoin’s price stability and growth.
Technological advancements, such as improved scaling solutions like those offered by StarkWare and BitcoinOS, are vital for addressing Bitcoin’s limitations and expanding its use cases. Finally, broader economic trends, including inflation and interest rate policies, will continue to shape the overall cryptocurrency market and, consequently, Bitcoin’s value.
While the potential for significant price appreciation, as suggested by forecasts from investment firms like VanEck, remains a compelling narrative, challenges such as the scalability of Layer 2 solutions and the broader economic climate must be carefully considered. The decline in Bitcoin Ordinals sales and the overall NFT market downturn may also impact investor sentiment.
The challenges faced by miners, including declining revenue due to the Bitcoin halving and increasing network difficulty, may also impact Bitcoin’s overall ecosystem. Additionally, the ongoing consolidation in the mining sector, with companies like Riot Platforms acquiring competitors, could reshape the industry’s competitive landscape and influence Bitcoin’s security and decentralization.
