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Ether ETFs Challenge Bitcoin, Whales Accumulate – What’s Next for BTC?

Veronika Rinecker
Last updated: | 15 min read
Bitcoin

Bitcoin price peaks and dips, new Ether ETFs, and whale accumulations—what could these mean for Bitcoin’s future? Find out in our report.

Key takeaways:

  • Bitcoin saw notable volatility in May, starting below $60,000 and peaking at $71,470 on May 20 on optimism around spot ETF inflows. However, it struggled to maintain momentum and ended the month at $67,000, reflecting cautious market sentiment.
  • The launch of Ether ETFs affected Bitcoin’s market dominance, indicating a trend towards greater diversification among investors.
  • A decrease in Bitcoin transfers from private wallets to exchanges, dropping from 70,999 to 32,450 between April 18 and May 31, indicates accumulation by large holders or “whales.” This trend points to a potential reduction in the circulating supply available for trading.
  • Bitcoin’s ecosystem saw significant developments, including Jack Dorsey’s Ocean Mining Pool opening in El Salvador and Tether’s $150 million investment in Bitdeer Technologies.
  • Bitcoin-based NFTs generated $192 million in sales volume in May, a 71% decrease from April. The number of NFT transactions on Bitcoin Ordinals exceeded 153,000.

What You’ll Find in This May Bitcoin Analysis:

      1. What is Bitcoin?
      2. BTC Price Performance And On-Chain Analysis
      3. Spot Bitcoin ETFs
      4. Bitcoin Mining Updates
      5. Bitcoin Ecosystem News
      6. Bitcoin DeFi Updates
      7. Bitcoin Ordinals NFTs
      8. Bitcoin’s Path Forward

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. It eliminates the need for third-party intermediaries in financial transactions. Bitcoin 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.

BTC Price Performance and On-Chain Analysis


In May 2024, Bitcoin (BTC) price demonstrated both resilience and volatility, navigating a complex interplay of factors. Early in the month, Bitcoin was trading below the $60,000 mark. On May 20, BTC price reached $71,470, buoyed by optimism surrounding spot ETF inflows.

However, Bitcoin struggled to maintain momentum above $70,000 and fell to $67,000 by the end of the month, encountering resistance that highlighted cautious market sentiment.

Bitcoin price
BTC/USD daily chart. Source: TradingView

Bitcoin’s dominance was challenged by the introduction of Ether ETFs, which diverted some investor interest away from Bitcoin. This competition highlighted the increasing diversification within cryptocurrency, with investors exploring alternative assets and opportunities beyond Bitcoin.

After peaking at $73,835 in March, Bitcoin entered a consolidation phase. According to Glassnode’s “The Week On-chain” report from May 28, BTC’s recent performance over the weekly, monthly, and quarterly time frames has been relatively muted compared to previous cycles.

Historically, BTC has shown robust price gains of over 20% within a 90-day window over these intervals, indicating a sustained uptrend. However, over the past quarter, only five days have achieved this level of increase, reflecting a more subdued market environment.

The recent sideways movement in BTC price coincides with a decrease in transfers from private wallets to exchanges. This suggests that large holders, often called whales, are accumulating Bitcoin. Between April 18 and May 31, the number of wallets depositing Bitcoin into exchanges dropped significantly. This decrease, from 70,999 to 32,450, may indicate that whales are buying and holding their BTC. It could potentially reduce the circulating supply available for trading and contribute to lower market volatility.

Bitcoin exchange depositing transactions
Number of addresses depositing Bitcoin to exchanges (April & May). Data source: CryptoQuant

Other on-chain metrics and technical indicators in May suggested a potential for a bigger move in BTC price, albeit with a resetting of some metrics. Daily transactions increased by 71% between May 1 and May 26, reaching 852k. However, this recovery was short-lived, and the number of daily transactions dropped again by the end of the month, reaching 510k transactions on May 30.

Bitcoin daily transactions
Number of daily transactions on Bitcoin in April and May 2024. Data source: Artemis

The number of new Bitcoin wallets created dropped to its lowest level since 2018. This decline in new wallet creation could imply a slowdown in new user adoption or cautious behavior among potential new investors.

Bitcoin’s daily active addresses experienced significant fluctuations in May. Beginning at 461,000 on May 1, the number increased to 489,000 by May 13. However, this was followed by a steep decline to 296,000 by May 29.

Bitcoin daily active addresses
Daily active addresses on Bitcoin in April and May 2024. Data source: Artemis

In VanEck’s May 2024 Bitcoin ChainCheck report, the total value transferred on the Bitcoin network fell by 13% to $44.60 billion, yet it still ranked in the top 85% of all-time activity levels. Meanwhile, transaction fees dropped significantly by 78% to an average of $3.68, suggesting less network congestion as activity decreased.

On May 6, Bitcoin reached a significant milestone by surpassing one billion transactions processed. This achievement came about 800 weeks after Bitcoin’s inception, highlighting the network’s ongoing growth and durability. The high number of transactions demonstrates continued interest and reliance on Bitcoin as a decentralized and secure method for transferring value.

Bitcoin’s futures open interest surged to its highest level in 16 months, reaching approximately $34,02 billion on May 30. This rise in open interest reflects heightened market engagement and speculative interest, signaling traders’ expectations of significant price movements.

BTC futures open interest
Aggregate Bitcoin futures open interest, USD. Data source: Coinglass

May’s Bitcoin options market saw a substantial $6.5 billion in expiries, with a dominance of bullish positions. The prevalence of bullish options indicates that a significant portion of market participants were betting on price increases. This level of bullish sentiment in the options market often exerts upward pressure on prices, as traders adjust their positions and expectations in alignment with these options. The large-scale expiry of these bullish options underpinned positive market sentiment and reinforced the price floor around the $70,000 mark in May.

Spot Bitcoin ETFs


BlackRock’s Institutional Bitcoin Trust (IBIT) continued to lead spot Bitcoin ETF net inflows in May, holding more than 50% of the Bitcoin ETF market.

The daily market share by volume for spot bitcoin ETFs. Source: The Block
In May, assets in spot Bitcoin ETFs topped $278 billion, highlighting their growing popularity. Exchange-traded products (ETPs) offer investors a way to engage with Bitcoin without owning the actual currency. They allow easy entry and the ability to trade Bitcoin within traditional financial markets, attracting diverse investors.

The investment scene for Bitcoin ETFs saw variable inflows and outflows in May, suggesting a stabilizing sentiment among investors. Both long-term holders and new participants contributed to balancing market dynamics.

Total spot Bitcoin ETF net inflow in USD. Source: Coinglass

In a significant development for the European market, Bitcoin and Ethereum exchange-traded products were listed on the London Stock Exchange (LSE) following approval from the UK’s Financial Conduct Authority (FCA). The WisdomTree Physical Bitcoin ETP and the WisdomTree Physical Ethereum ETP were among the first crypto ETPs to be listed in the UK. These ETPs will be available exclusively to professional and institutional investors.

Conversely, in Hong Kong, Bitcoin ETFs experienced a dramatic reversal, with record outflows wiping out two weeks of inflows in a single day, on May 13. Bosera, ChinaAMC, and Harvest Global’s spot Bitcoin ETF funds posted net outflows of $32.7 million, with ChinaAMC’s Bitcoin fund coming in as the biggest loser on the day with $15.5 million in outflows, according to The Block data.

The daily net flows to the Hong Kong spot bitcoin ETFs. Source: The Block

Bitcoin Mining Updates


The Bitcoin mining sector faced challenges from the recent halving event, while also seeing major investments and advancements in technology and geographic expansion.

Hashprice Peaks and Plummets

The halving reduced Bitcoin’s block subsidy from 6.25 BTC to 3.125 BTC. As a result, miners now earn approximately $209,375 per block from the emission of new Bitcoins, down from $418,750, based on current market prices.

Immediately following the halving, miners experienced a temporary surge in revenue from transaction fees, in addition to their earnings from newly minted Bitcoin. This boost was driven by a new token standard on Bitcoin called Runes, which led to an all-time high of over $80 million in transaction fees on April 20, 2024 – a striking figure given that miners earned approximately $797.7 million in total transaction fees throughout 2023.

This led to a brief spike in Bitcoin mining profitability. Hashprice – a key metric miners use to gauge the earnings potential of their operations – peaked at $173/PH/Day the day after the halving. However, as activity related to Runes and transaction fees declined, hashprice subsequently plummeted to a record low of $44/PH/Day on May 1.

Bitcoin hashrate
Bitcoin mining profitability (hash price) hits record lows in May. Source: Hashrate Index

Daily revenue from Bitcoin mining dropped to less than $3 million in May from a previous daily average of about $6 million, according to Blockchain.com data.

Jack Dorsey’s Ocean Mining Pool

Jack Dorsey-backed Ocean Mining Pool, a significant player in the Bitcoin mining industry, opened its headquarters in El Salvador in May. This move highlights the increasing importance of Central America as a hub for Bitcoin mining, driven by favorable regulatory environments and potential for renewable energy sources.

Tether’s Investment in Bitdeer

Tether, the operator of the world’s largest stablecoin, Tether (USDT), made a substantial investment of $150 million in Bitdeer Technologies Group, a crypto mining firm founded by Jihan Wu.

Bitdeer plans to use the net proceeds to fund further expansion of its data center, development of an ASIC-based mining rig and other purposes.

Kenya & Marathon Digital Renewable Energy Collaboration

Marathon Digital entered a partnership with Kenya’s Ministry of Energy and Petroleum (MOEP) to develop renewable energy projects. This collaboration aims to utilize Kenya’s geothermal and hydroelectric resources, reflecting a broader industry trend towards sustainable mining practices and diversifying energy sources to reduce carbon footprints.

Unchained’s $5M Bitcoin Endowment

Bitcoin mining firm Unchained partnered with the University of Austin, Texas, to establish a $5 million endowment fund, which will remain invested in BTC for at least five years. This initiative aims to support academic research and education related to Bitcoin, fostering a deeper understanding and integration of cryptocurrency in academic and technological spheres.

Bitcoin Ecosystem News


May 2024 was a dynamic month for the Bitcoin ecosystem, marked by notable developments across various sectors. From corporate investments and technological innovations to significant security incidents, the month showcased both the cryptocurrency’s growing adoption and the challenges it faces.

Japanese Firm Metaplanet Adopts Bitcoin as a Reserve Asset

MetaPlanet, a publicly traded investment firm listed on the Tokyo Stock Exchange, announced on May 13 the addition of 117 BTC to its reserve assets, demonstrating a strategic shift towards incorporating Bitcoin as a long-term store of value.

El Salvador Enhances Bitcoin Integration

El Salvador continued its pioneering efforts to integrate Bitcoin into its economy. The country launched its Bitcoin treasury monitoring website, increasing the transparency of its Bitcoin holdings and transactions. El Salvador has bought seven BTC worth over $471,744 during the past seven days, according to the website. The country officially holds 5,779,76 BTC, which is currently worth approximately $389,5 million.

El Salvador holds almost 5,780 BTC. Source: Bitcoin.gob.sv

MicroStrategy’s Bitcoin Expansion

Business intelligence company MicroStrategy, the largest corporate holder of Bitcoin, announced the launch of a decentralized identity solution on the Bitcoin network using Ordinal-based inscriptions for storing and retrieving information.

Named MicroStrategy Orange, the solution was unveiled by executive chairman Michael Saylor during the Bitcoin For Corporations conference on May 1.

MicroStrategy Orange is open-source, independent of sidechains, and can process up to 10,000 decentralized identifiers in a single Bitcoin transaction, according to Saylor. Its aim is to deliver trustless, tamper-proof, and long-lived decentralized identities using only the public Bitcoin blockchain as a data source.

Furthermore, on May 31, MicroStrategy was added to the MSCI World Index, a key global equity index, highlighting its growing influence and recognition in the corporate world due to its substantial Bitcoin holdings.

Binance Wallet Supports Bitcoin ARC-20

Binance Wallet integrated Bitcoin ARC-20 atomical assets into its native Web3 wallet through its Inscriptions Marketplace, expanding the usability and interoperability of Bitcoin within the broader cryptocurrency ecosystem. This integration allows Bitcoin to interact with a wider range of blockchain assets, enhancing its functionality and appeal to a broader audience.

Funding for Bitcoin-Native Platform

Arch, a Bitcoin-native application platform, secured $7 million in funding led by Multicoin Capital, OKX Ventures and others.

Major Bitcoin Theft From Japanese Exchange DMM Bitcoin

Centralized cryptocurrency exchange DMM has lost more than $305 million worth of Bitcoin due to a private key hack on its servers on May 30. The exchange confirmed the hack on its website, stating that all user deposits are “fully guaranteed”.

Bitcoin DeFi Updates


May 2024 witnessed a dynamic interplay between the rise of innovative Bitcoin-based DeFi protocols and a sharp decline in user engagement for some newly launched technologies.

Rise and Fall of Bitcoin Runes

Bitcoin Runes, an innovative token standard introduced to enhance Bitcoin’s DeFi ecosystem, experienced a dramatic shift in activity levels throughout May.

Since its launch on April 20, Runes transactions have dominated Bitcoin blockchain traffic on eight different days, mostly during the weekends, driving daily transactions to new highs. However, excitement quickly faded. As of May 30, Runes represented 19% of Bitcoin transactions, much higher than Bitcoin Ordinals (0.6%) and BRC-20 (1.1%). The rest was taken up by BTC. As a result, Runes transactions are down by over 76% since their all-time high (81,3% on April 23).

Share of Bitcoin transactions by protocol type. Source: Dune Analytics

New daily Runes etched on Bitcoin fell by a staggering 99% from the post-halving peak, reflecting a significant drop in user interest and engagement.

New daily Runes etched on Bitcoin since April 20. Source: Dune Analytics

Despite the overall decline in activity, MaginEden and OKX managed to capture over 41% and 31%, respectively, of the Bitcoin Runes market share through their Web3 marketplaces, establishing themselves as dominant players in this niche.

Bitcoin Runes trading activity by exchange. Source: GeniiData

The sharp decline in Runes transactions has been attributed to high network fees and the initial novelty wearing off, which led to a reduction in active Bitcoin addresses and user participation.

Expanding Horizons for Bitcoin DeFi

While Bitcoin Runes faced challenges, the broader Bitcoin DeFi ecosystem continued to grow, fueled by new protocols and technological innovations.

  • Leading Bitcoin Layer 2 network Stacks reported a record high in active accounts, underscoring the growing interest in Bitcoin DeFi solutions that offer enhanced functionality and user engagement.

  • The Bitcoin staking protocol Babylon raised $70 million in fresh financing led by Paradigm, indicating strong investor confidence in the future of Bitcoin-based staking solutions. Babylon builds infrastructure that allows Proof of Stake (PoS) systems to obtain staking capital from Bitcoin.
  • Hermetica Labs, a Stacks-native DeFi protocol on Bitcoin, launched the first Bitcoin-backed synthetic dollar, known as USDh. This financial product aims to provide investors with a stable asset backed by Bitcoin, combining the benefits of cryptocurrency with the stability of traditional fiat currencies.

  • Decentralized blockchain infrastructure provider Ankr expanded Bitcoin liquid staking tokens to the AI-focused blockchain Talus, integrating advanced technology with Bitcoin’s staking capabilities.
  • Solana-to-Bitcoin cross-chain bridge Zeus Network will launch its Zeus Program Library (ZPL), connecting the two ecosystems by Q3 2024. The bridge aims to further enhance interoperability between the major blockchain networks, providing new opportunities for liquidity and asset transfer.

Bitcoin Ordinals NFTs


The overall NFT market experienced a significant downturn in May 2024. CryptoSlam reported a 54% drop in NFT sales volume across major chains, including Bitcoin, Ethereum, and Solana. This decline reflects broader market trends and potential investor fatigue, with sales volume falling from over $1 billion in April to $624 million in May.

According to CryptoSlam, Bitcoin-based Uncategorized Ordinals led the chart, but its sales volume is down 71% compared to April.

Blockchain Collection Sales Transactions Buyers Sellers
Bitcoin Uncategorized Ordinals $46,838,285 77,574 34,399 22,871
Blast Fantasy Top $44,218,994 264,178 16,938 26,246
Mythos DMarket $23,793,435 997,740 49,708 41,730
Bitcoin NodeMonkes $20,142,946 1,127 693 638
Immutable-Zk Guild of Guardians $18,508,218 3,734 2,480 2,554
Ethereum CryptoPunks $14,764,775 103 58 66
Ethereum Bored Ape Yacht Club $12,572,239 273 138 152
Solana DogeZuki Collection $10,124,690 246,576 245,264 10,003
Solana Mad Lads $9,803,413 845 490 448
Immutable Gods Unchained Cards $9,630,495 336,009 9,029 8,110

While Bitcoin-based NFTs gained over $192 million in sales volume in May, they also experienced one of the largest declines in sales volume (71% less than in April). The data further revealed that the Bitcoin network attracted around 61k buyers and 45k sellers of NFTs during May. The number of NFT transactions on Bitcoin Ordinals reached more than 153k.

Bitcoin NFTs sales volume
Sales volume for Bitcoin-based NFTs reached $192 million in May. Data source: CryptoSlam

Notable NFT launches in May:

  • IronHeadz (May 1 – May 8): Artists from Call of Duty and EA Sports have used Unreal Engine to create a Web3 WWII video game. This game provides an immersive narrative of warfare while supporting veterans. Since its inception in 2022, IronHeadz has made significant progress and has now launched its 5000 NFT collection.
  • Elders Of Crypto (May 16 – May 23). Elders Of Crypto is a pioneering Bitcoin-based NFT collection that merges digital art with the rich cultural lore of ancient civilizations. This collection features 10,000 intricately designed NFTs, each depicting a legendary elder figure from various mythologies.
  • Coinheads (May 26 – June 2): Coinheads is an NFT collection dedicated to those who keep Bitcoin and crypto at the forefront of their minds. With 5,555 PFPs, Coinheads is supported by Brazil’s largest crypto community, Yield Hackers by Caio Vicentino. Created by artist Rodrigo Pafs, these NFTs feature a clean pixel art style that captures both general market concepts and significant historical movements in Bitcoin.

Bitcoin’s Path Forward


As we look beyond 2024, Bitcoin faces numerous influences on its path forward. The launch of Ether ETFs is increasing competition, prompting investors to diversify beyond Bitcoin, which could reshape its market stance. The current struggle to sustain prices above $70,000 highlights cautious sentiment, pointing to a need for substantial market drivers like regulatory progress or tech advances to spur growth.

Institutional interest remains strong, especially shown by the flow into Bitcoin ETFs, which will be key to Bitcoin’s price stability. However, varying inflow rates across regions like the U.S. and Hong Kong introduce potential volatility, emphasizing the need for regulatory clarity to stabilize and enhance Bitcoin’s appeal.

Meanwhile, Bitcoin’s technical indicators, like reduced wallet transfers to exchanges, suggest a trend of accumulation by major holders, potentially stabilizing prices by limiting available trading supply. Nonetheless, a downturn in new wallet creation and daily transactions signals possible hurdles in user engagement, risking stagnation without fresh technological or market incentives.

The mining sector, vital to Bitcoin’s ecosystem, continues adapting despite challenges from reduced block rewards, highlighted by significant investments like those from Tether and Jack Dorsey’s initiative. Furthermore, the growth of Bitcoin-centric DeFi platforms and new financial products is set to broaden Bitcoin’s utility and attractiveness, fostering greater integration into the global financial landscape.