Bitcoin Demand Drops Significantly Since April 2024, Price Falls to USD51,000

Demand for Bitcoin has reportedly declined significantly since April 2024, sparking concern among many parties. The popular digital asset, which enjoyed a massive growth of 496,000 Bitcoin in April, has now experienced a negative growth of 25,000 BTC, according to a report released on August 20 by data analysis firm CryptoQuant.

To calculate the demand, the report measures the difference between Bitcoin's total daily block subsidies and a change in the number of Bitcoins that remained immobile for one year or more. This decline is said to have contributed to a decrease in Bitcoin prices, which fell from around US$70,000 (Rp1.05 billion) in April to about US$51,000 (Rp788 million) in early August, although the asset still recorded a 33% return so far this year.

One major factor affecting the reduction in Bitcoin demand is the decline in ETF purchases in the United States, the report reveals. The volume of ETF purchases has dropped drastically, from 12,000 BTC in March to an average of only 1,300 BTC between August 11 and August 17. This decrease in purchases helped reduce the price of Bitcoin in the market.

After the launch of the ETF, the price premium of Bitcoin in Coinbase, one of the largest exchanges in the United States, reached 0.25% in early 2024, but it has now dropped to 0.01%, further highlighting the decline in Bitcoin demand in the country. "Recovery in the purchase of the spot ETF is essential to boost Bitcoin demand as a whole, potentially triggering a significant price increase," the analysis notes.

On the other hand, despite the negative trend among institutions, Bitcoin permanent holders are actually taking advantage of this price drop to increase their holdings. The total amount of Bitcoin owned by permanent holders addresses that have never sold Bitcoin increased at the highest monthly level, reaching 391,000 BTC. Demands from permanent holders increased faster than in the first quarter of 2024, when the price of Bitcoin exceeded 70,000 US Dollars (Rp1.05 billion), the report said.

Meanwhile, paus' addresses that have 1,000 to 10,000 coins actually reduce their total holdings. According to the analysis, a 30-day change in whale ownership fell from 6% in February, which is the fastest rate since February 2019, to only 1% at the moment. Monthly growth of more than 3% in whale ownership typically correlates with the increase in Bitcoin prices.

With the increasingly complex situation in the Bitcoin market, various factors, including the policy of purchasing ETFs and the activities of the whales, will continue to be the main determinant of the direction of this crypto price movement going forward.

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