BCGAME - Free 5BTC Daily Bonus!The hash rate recovery indicates that some mining operations are starting to come back online in new locations outside of China, and the worst of the crackdown may be over, according to a recent analysis by cryptographic financial intelligence provider CoinMetrics.
With mining operations pulling out of China following the ongoing government crackdown, Bitcoin's hash rate has plummeted to its lowest level since 2019. However, after bottoming out near the end of June, it has started to recover in July and August.
Source: CoinMetrics
Bitcoin's average profit spent on production (SOPR) ratio over seven days (BTC) - a ratio between the price of bitcoin at the time the UTXOs are spent and its price at the time they were created - was mostly negative June, which signaled that investors were selling the cryptocurrency at a loss.
But BTC SOPR turned positive again in August, a sign that the capitulation period is over and the market is back on more solid ground, the report said.
Other cryptocurrencies are also improving their posture this month.
"The rest of the encryption market also rebounded in the last month," said CoinMetrics. “Small capitalization assets outperformed BTC in the last 30 days, led by cardano (ADA) and polkadot (DOT) . Other potential ethereum competitors emerged last month, including new all-time records for solana (SOL).”
Ethereum (ETH) has outperformed bitcoin over the past 30 days, driven by booming sales of non-fungible token (NFT) assets such as CryptoPunks, Art Blocks and others, according to the firm.
The use of BTC and ETH continued to increase in the last week, growing 4,6% and 4,2% week to week, respectively.
While ETH's transactions grew 3%, total fees dropped 25,9% to an average of $16,3 million per day. ETH rates have cooled from the previous week, but still remain at the highest level since May, mainly due to an avalanche of further NFT declines, the analysis said.
Spot trading volume has also started to show signs of major improvement as the “combined reliable trading volume of BTC, ETH, XRP, BNB, DOGE, ADA, DOT and UNI topped [USD] 25B on Aug 19” , according to the company.
However, it was still well below the levels seen in April and early May. As of May 9, DOGE alone was responsible for over $20 billion in turnover.
Another significant development relates to a spike in BTC and ETH addresses, as the number of these addresses with relatively small shares has increased over the course of this year.
“The total number of BTC addresses between 0,001 and 0,1 bitcoin has increased ~15% so far in 2021, but has been somewhat stable since the end of April,” according to the analysis, adding:
“The number of ETH addresses with 0,01 to 1 ETH increased ~58% year-to-date and continued to increase steadily throughout the summer. With the NFT summer intensifying on Ethereum, it's possible that retail interest in NFTs is helping Ethereum adopt new users.”
