Bitcoin price at all-time high while other metrics at lows
Around 11am this morning in New York, bitcoin (BTC) made another all-time high above $109,400. Those fortunate enough to be awake to celebrate BTC almost surpassing the threshold overnight cheered the rally and shared celebratory posts across social media.
At the same time, however, other metrics measuring the health of the network were nearing all-time lows.
For example, Bitcoin’s average transaction confirmation time this month is less than 50 minutes, including many days below 20 minutes. This metric of mempool congestion and the competition for blockspace gauges the time for a transaction with miner fees to join a mined block.
Bitcoin hashrate distribution is also low on the decentralization spectrum. Over the past year, just four mining pools have mined a majority of Bitcoin’s blocks.
Although individual miners are free to switch pools, the centralization of block template construction by pool operators remains an obvious laggard of Bitcoin’s goal for true decentralization.
Read more: First bitcoin mining pool adds Stratum V2 feature to circumvent Bitmain
Average transaction fees are also near all-time lows. The fee users must pay to incentivize miners to prioritize their transaction is just two satoshis per virtual byte (sats/vB) for “no priority” and four sats/vB “low priority” rank.
On several days this month, the average transaction fee was less than $1. That compares to all-time high fees above $127 when demand for blockspace was far higher.
Instead, an all-time chart of Bitcoin’s average transaction fees these days is near its lowest level in years.
But it doesn’t end here. Miners’ revenue as a percentage of the transaction volume is trending below 1%. This indicates that miners still overwhelmingly rely on the coinbase block subsidy, rather than user demand for blockspace, for profitability.
The total number of unconfirmed transactions in Bitcoin mempools is also at its lowest level in a year.
Overall, the USD value of BTC is, at least on the surface, the most important valuation. Nevertheless, a variety of other metrics provide deeper insight into the health and decentralization of the underlying network.
Unfortunately, several of these metrics are trending at lows while the price of BTC is attaining new highs.
Driving the rally has been a buying spree by new BTC treasury companies emulating Michael Saylor’s MicroStrategy (MSTR).
In the last month alone, copycats like Twenty One by Tether, Nakamoto by David Bailey’s BTC Inc., Strive by Vivek Ramaswamy, Méliuz by Israel Salmen, Nuvve by Gregory Poilasne, and many other new treasury companies have announced plans to acquire BTC.
Large incumbents like MicroStrategy, MARA, and MetaPlanet have also continued to purchase more BTC on leverage.
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