A Bitcoin Rebound ‘Round the Corner, One May Hope

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In a manner most intriguing, Bitcoin’s network activity has displayed a sign that, as some astute observers might fancy, often heralds market modesty. Indeed, such signs have thus appeared with a hint of hope when the market found itself at the nadir of its fortunes.

Summary

  • Most curiously, the Bitcoin hashrate has declined by some 4%, the steepest descent recorded since the blossoming month of April in the year of our Lord, 2024.
  • It appears that corporate treasuries, showing a most splendid proclivity for accumulation, have procured no fewer than 42,000 BTC as the prominence of exchange-traded product holdings seems somewhat diminished.
  • Observing the tides of bygone times, one notes that past declines in the hashrate have frequently been met with a price ascent, averaging an impressive 72% in 180 days hence.

In the most recent data, one can perceive a trifecta of pressure exerted upon miners, dealers, and short-term holders, even as those of a more enduring disposition have retained their convictions unshaken.

Bitcoin’s network hashrate has declined by some 4% over the past thirty days, presenting the steepest drop witnessed since the verdant month of April 2024, as reported by VanEck. This retracting movement followed a month rather coarse for the currency, with Bitcoin itself diminished by 9%, and volatility spiking with fervor beyond 45%, the most vigorous it has been since April of this year.

Miner stress deepens as hashrate slips

The economics of mining have tightened at a most alarming rate. The breakeven cost of electricity for a preeminent 2022 model of miner, the S19 XP, has plummeted from a tidy sum of $0.12 in the month of December 2024 to a mere $0.077 this month. Fees, too, have lost some of their lustre, with daily revenue therefrom diminished by 14% from month to month, whilst the growth of new addresses has slipped by a whole 1%.

VanEck remarks, with a nod to historical precedent, that such decreases in hashrate oft appear when miners are coerced into retreat or contraction. Historically, these times have marked not the inaugural plummet into despair but rather signals of exhaustion.

Nevertheless, the data of the long view presented by VanEck suggests that Bitcoin has, time and again, basked in the light of prosperity following periods of such hashrate debility. Since the year of grace 2014, when the 90-day growth of hashrate turned a considerable shade of negative, the returns seen in the subsequent 180 days have been positive on 77% of occasions, with an average gain standing at a delightful 72%. Outside these spells of waning growth, the average returns lay nearer to 48%.

The slowdown of zealous calculations we now observe has been surely tied to matters external. In the venerable lands of China’s Xinjiang, a realm accounting for about 1.3 GW of mining prowess has reportedly been stilled by the scrutiny of policy, potentially purging as much as 10% of the world’s cumulative hashpower. It is said that around 400,000 machines may have abandoned their toil.

Corporate buyers step in as leverage fades

Even as the holdings of spot Bitcoin ETPs have lessened by 120 basis points from one month to the next, settling at 1.308 million BTC, the esteemed corporate treasuries have ventured in quite the opposite direction. Between the mid-days of November and December, these treasure-holding entities have acquired an additional 42,000 BTC, bringing their coffers to a proud 1.09 million BTC-an enormity not seen since the warm days of July.

This boastful acquisition was chiefly orchestrated by Strategy, which added 29,400 BTC, with its market NAV persistently amenable above the number 1. It seems other firms are now navigating away from the issuance of common stock in favour of preferred shares as a means to finance future acquisitive ventures.

On-chain data, much like the whispers of a well-informed society, has revealed a discernible division among holders. Coins held for the span of 1 to 5 years have experienced rather pronounced outflows, inclusive of a 12.5% declination in the cohort aged between two and three years. In stark contrast, the coins which have been in the custody of their owners for over five years have remained largely unmoved-if not slightly burgeoning-in balance.

VanEck, with all the perspective afforded by their vantage, perceives a pattern most familiar. While the short-term pressure serves to distribute among those of less sturdy resolve, and miners find their spirits somewhat dwindled, those who hold with longevity have shown no sign of parting with their hoard. In the annals of past cycles, such a brew has often been the overture to a period of pricing equilibrium in the ensuing months.

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2025-12-23 05:50