Bitcoin’s Sad Little Secret 🤫

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  • The price of Bitcoin, ah, still stubbornly high. But the whispers… the *transaction fees* are most distressingly low. A most peculiar state of affairs, wouldn’t you agree?
  • The young people, it seems, have grown bored with Bitcoin and are frolicking amongst the memecoins on Solana. Such fickle affections!
  • The miners, those sturdy, industrious souls, are now contemplating a life beyond the pickaxe – dabbling in the mysteries of Artificial Intelligence. A most uncouth, yet perhaps necessary, shift.

Good Morning, Asia. Or, as one might say with a sigh, another day, another digital distraction. Bitcoin continues to hover near its lofty heights, yet a curious stillness has settled upon the chain itself. Reports – those infernal, precise reports – indicate that transaction fees have descended to levels not seen in a decade, even as the Bitcoin approaches… well, let us say a considerable sum.

In times past, when enthusiasm gripped the market, these fees would rise in concert with the price, a frantic bidding for a place within the blocks. Now, however, the curve is as flat as a nobleman’s affectation, a clear indication that the very act of *using* the Bitcoin network is no longer fueling the climb. A most unsettling thought, wouldn’t you say? 🧐

A recent study, filled with cold, hard numbers, reveals a disheartening truth: median daily fees have plummeted by over 80% since April. One whispers of blocks clearing with a mere pittance – a single satoshi per vbyte. Nearly half of these precious blocks remain… unfilled. A truly lamentable spectacle, signifying a distinct lack of fervor. Like a grand ball with nobody to waltz.

This, of course, stands in stark contrast to previous manias, where each rise in price brought with it a congestion that would make a St. Petersburg traffic jam seem tranquil.

The explanation, it appears, lies in the accumulation. Those custodians, those great hoarders of Bitcoin, now hold over a million and a half of the coins. And those coins, once entrusted to their care, remain largely… dormant. A most peculiar habit, if you ask me.

Meanwhile, the restless spirit of the retail investor has flown off to Solana, a land of memecoins and NFTs, where transactions are swift and inexpensive. The result? The price of Bitcoin is now dictated by these institutional inflows while the organic demand – the very pulse of the network – has grown faint. It’s a bit like a play where all the interesting characters have left the stage. 🎭

For the miners, this presents a particularly thorny predicament. With the rewards halved and the fees contributing scarcely a fraction of their income, their livelihood is, shall we say, *precarious*. They are, therefore, turning their attention to the siren song of AI and high-performance computing. A desperate gamble, perhaps, but one born of necessity.

Some even suggest that the complete abandonment of mining by entities such as Galaxy Digital may serve as a model for the entire industry. A rather dramatic pronouncement, wouldn’t you agree?

The market, it seems, approves of this diversification. While Bitcoin itself has experienced a minor decline, the CoinShares Bitcoin Mining ETF has enjoyed a surprising rally. It appears investors prefer a miner who has Hedged Their Bets, rather than one clinging stubbornly to the past. Oh, the irony! 🙄

The miners themselves corroborate this narrative. Hive, Core Scientific, and TeraWulf have all reported improved results thanks to their ventures into the realm of AI hosting.

Those, however, who remain tethered to the traditional methods – Bitdeer and BitFuFu, for example – find themselves exposed to the vagaries of electricity costs, the depreciation of equipment, and a market for fees that, as one report delicately puts it, is “anything but robust.” A most unfortunate situation, wouldn’t you say?

The contrast is striking. Galaxy’s research warns of a stagnating settlement role for the Bitcoin blockchain. Yet, Galaxy’s own coffers are being filled by the burgeoning demand for AI data centers. A case of do as I say, not as I do, perhaps?

The data, in its cold, impartial manner, speaks for itself. Without genuine demand for blockspace, the fees cannot sustain the security of the network. And if those fees remain low, the market seems to be signaling that the future of the mining sector lies in Artificial Intelligence, not Bitcoin. A most unsettling prospect for those of us who believed in the original vision.😫

Market Movements

BTC: Bitcoin traded at $113,286.95, down 1.79%, having briefly stumbled to a six-week low. The entire crypto landscape trembled under the weight of liquidations and volatility.

ETH: Ether remained largely unchanged at $4,779, buoyed by Jerome Powell’s conciliatory remarks regarding potential rate cuts in September.

Gold: Gold settled at $3,371, also benefiting from the shift in expectations regarding monetary policy.

Nikkei 225: Asia-Pacific markets experienced a modest rise, with Japan’s Nikkei 225 gaining 1.08%, spurred by the anticipation of a more lenient Federal Reserve.

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2025-08-25 04:37