In August, Bitcoin experienced its largest monthly decline since November 2022, resulting in over $55 billion being drained from the market.
The crypto market was highly volatile in August, with Bitcoin dropping from nearly $30,000 to $25,200. The volatility was mainly driven by news events.
Capital Outflows Worth $55 Billion
A report from Bitfinex revealed that approximately $55 billion was withdrawn from the market in August across Bitcoin, Ethereum, and five major stablecoins. The Aggregate Realized Value metric was used to derive this figure.
Bitfinex explained that the metric analyzes the realized capital of BTC and ETH along with the combined supply from the top five stablecoins: USDT, USDC, BUSD, DAI, and TUSD.
Bitcoin Miners Contributed Heavily to Selling Pressure
While the supply of Bitcoin held by long-term holders is near all-time highs, miners have been selling their positions. Bitfinex estimates that Bitcoin’s cost of production is around $24,287 per BTC, which is close to its market price.
Data from Glassnode also shows a sharp decline in the Bitcoin balance in miner wallets since August 25.
Event-Based Volatility
The report highlights that event-based volatility is affecting the crypto market. For example, Bitcoin’s crash to $25,200 on August 17 and Grayscale’s victory against the SEC on August 29 resulted in significant price movements.
Hot Take: Bitcoin Faces Volatility and Selling Pressure
In August, Bitcoin faced significant volatility and selling pressure. The price declined by over 10%, marking its largest monthly drop since November 2022. Additionally, more than $55 billion was drained from the crypto market. This volatility was driven by various factors, including news events and the selling activities of Bitcoin miners. The supply of Bitcoin held by long-term holders remained high, while miners took advantage of the production cost being close to the market price to sell their positions. Event-based volatility also played a role in price movements. Overall, Bitcoin’s performance in August highlighted the ongoing challenges and dynamics within the cryptocurrency market.
By
By
By
By
By