Summary We noticed some divergence between prices and on-chain activity in February, indicating that speculative forces drove Bitcoin’s action this month. Bitcoin dominance rose slightly in February from 51% to 52%. Bitcoin miners rallied sharply in February as the spot price exceeded many miners’ post-halving costs. VanEck Monthly Bitcoin ChainCheck presents on-chain indicators for investors to directly assess Bitcoin blockchain's health and adoption. Please note that VanEck has exposure to Bitcoin ( BTC-USD ). We noticed some divergence between prices and on-chain activity in February, indicating that speculative forces drove Bitcoin’s action this month. Some takeaways for February 2024: Bitcoin’s Price Action Market sentiment: Bitcoin dominance rose slightly in February from 51% to 52%. For perspective, Bitcoin dominance rose from 52% to 62% in the 1-year prior to the 2020 halving before bottoming out at 39% at the end of the 2021 bull market. Regional trading: U.S. traders continued to dominate bullish price action, but the gap narrowed in February as the Chinese New Year brought out typically constructive seasonal patterns. Source: Glassnode, VanEck research as of 2/26/24. Past performance is no guarantee of future results. Funding rates: Bitcoin futures annualized basis (funding costs) rose sharply to 12% as traders re-gained some appetite for leverage. ETF flows absorbed more than the Bitcoin network’s daily issuance for all of February. Bitcoin’s Network Activity, Adoption, and Fees Daily transactions: in a divergence from price action, on-chain activity fell 7% in February and is now flat y/y. Tough comps arrive in May as we lap the first Ordinals ((NFT)) wave. New addresses fell 25% m/m and 7% y/y. It is fair to say that February was driven by ETF flows rather than on-chain activity. Ordinal inscriptions: Daily inscriptions plummeted 62% m/m. As a percentage of total transactions, inscriptions represent 40%. Total transfer volume: $40B in value was transferred across the Bitcoin network daily, up 3% m/m and +118% y/y. Such activity puts February in the 85th percentile of all time. Average transaction fees: The average user paid $6.13 in fees to send a Bitcoin transaction in February, down 26% m/m but still in the 90th percentile of recorded history. % Supply last active, last 180 days: Only 18% of Bitcoin has moved in the last 180 days, in the 3rd percentile of all-time inactive short-term supply. % Supply last active, last 3+ years: 44% of Bitcoin has not moved in 3+ years. This reading has never been higher. Bitcoin Market Health and Profitability Percent of addresses in profit: 90% of Bitcoin addresses are now in profit. Historically, this metric approaches 100% once it has hit 90% and can linger for a year or more. Net unrealized profit/loss: The net unrealized profit/loss ratio reached 0.52 in February, a level characterized as optimistic but not euphoric. Above 0.70 generally marks peaks. Bitcoin Miners Total daily BTC miner revenues: Bitcoin miners rallied sharply (+27%) in February as the spot price exceeded many miners’ post-halving costs. Total miner revenues reached $46M per day, in the 95% percentile of recorded history. Transfers from miners to exchanges: Miners sent an average of $5M a day in Bitcoin to exchanges, likely for sale. Such activity represents a 2% increase m/m. Miners may be better prepared for the halving than in previous cycles if BTC can sustain these levels. Chart of the Month: Percent of Bitcoin addresses in profit. Once this number hits 90%, it tends to hit 100%. Source: Glassnode, VanEck research as of 2/26/24. Past performance is no guarantee of future results. Bitcoin ChainCheck Monthly Dashboard Source: Glassnode, VanEck research as of 2/25/24. Past performance is no guarantee of future results. Notes: Net unrealized profit/loss ratio ((NUPL)) can be calculated by subtracting the realized market cap from the market cap and dividing the result by the market cap. When a high percentage of Bitcoin’s market cap consists of unrealized profits, it can be interpreted that investors are greedy. Background reading here . Links to third-party websites are provided as a convenience and the inclusion of such links does not imply any endorsement, approval, investigation, verification, or monitoring by us of any content or information contained within or accessible from the linked sites. By clicking on the link to a non-VanEck webpage, you acknowledge that you are entering a third-party website subject to its own terms and conditions. VanEck disclaims responsibility for content, legality of access, or suitability of the third-party websites. Disclosures Coin Definitions Bitcoin ((BTC)) is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Risk Considerations This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments, or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts, and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned is unknown. 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