On-chain Analysis Week 50 / 2024 : Blockchain Activity Surges

Overview

Bitcoin price crossed the $100k mark for the first time on December 5, after 5,256 trading days, with its market capitalization reaching a short-term peak of over $2 trillion. This is a historic milestone, demonstrating its maturity and ability to attract the attention of the global financial market.

Since its inception, Bitcoin miners have earned a total of $71.49 billion, demonstrating the system's sustainability in ensuring network security as well as creating strong economic incentives.

The Bitcoin network has processed a total of 1.12 billion transactions and $131.25 trillion in transfer volume. When adjusted for entity-adjusted real-world metrics, this data further highlights the real economic activity the network supports.

Additionally, the distribution of Bitcoin supply among different groups of holders shows diversity in ownership, from retail investors to large-scale institutions.

This confirms Bitcoin's broad appeal to all walks of life, cementing its position as a leading digital asset in the global financial ecosystem.

This report delves into the evolution of the Bitcoin network and its economic underpinnings, from its initial value of zero to the groundbreaking success it is today. Bitcoin has been around for over a decade, experiencing many ups and downs, but still maintaining its role as an inflation hedge and “digital gold.”

On-chain metrics

The difficulty adjustment mechanism in Bitcoin's Proof-of-Work (PoW) protocol is designed to ensure that new blocks are mined every 10 minutes on average, regardless of changes in the network's hashrate.

To maintain the target block mining time of 600 seconds, the mining difficulty is dynamically adjusted every 2016 blocks, which is approximately every 2 weeks.

The network's hashrate skyrocketed from 128,185 hashes/second in the early days to over 804,407,834,059,443,100,000 hashes/second by the time Bitcoin hit the $100k price mark.

This is an extraordinary increase, reflecting significant improvements in mining technology and the growing participation of miners in the network.

In total, miners have performed approximately 5.01 x 10²⁸ hashes to date. Notably, 37% of these hashes were calculated in 2024 alone, indicating a dramatic increase in computing power in recent times.

Bitcoin has gone through 5,256 trading days since its first exchange value, with an incredible journey from less than a penny to the $100k mark.

During this period, Bitcoin recorded 72 months with bullish candles (including December 2024), with an average gain of 37.4%, and 71 months with bearish candles, with an average loss of -14.2%.

The interesting balance between bull and bear markets is evident, showing the cyclical nature and strong volatility of the Bitcoin market.

In particular, the prominent positive skew during periods of significant price growth has highlighted Bitcoin's role as a breakthrough investment asset during critical times.

With positive performance for more than half of its operating period, Bitcoin continues to assert its leading position in the digital financial ecosystem and become an asset with outstanding profit potential despite facing risks.

As of December 5, a total of 19,791,952 BTC have been mined, which is 94.2% of the maximum limit of 21 million BTC. This shows that Bitcoin's supply is approaching its final limit, reinforcing the scarcity factor that is an important foundation for the asset's value.

Bitcoin's market capitalization also briefly surpassed the $2.0 trillion mark, marking a historic milestone as Bitcoin's market value officially surpassed that of precious metal silver (~$1.84 trillion).

This event not only affirms the strength of Bitcoin as a digital asset, but also reflects the shift in awareness and confidence of global investors from traditional assets to more decentralized and innovative solutions.

Bitcoin adoption is growing, from retail investors to large institutions. Bitcoin’s market capitalization surpassing silver’s is also symbolic, as silver has been considered a key store of value throughout history.

Of the total Bitcoin supply that has been mined, the distribution between different wallet size groups is as follows:

• <0.001 BTC: 5,491 BTC (0.027%)

• 0.001–0.01 BTC: 42,683 BTC (0.216%)

• 0.01–0.1 BTC: 271,641 BTC (1.373%)

• 0.1–1 BTC: 1,077,839 BTC (5.446%)

• 1–10 BTC: 2,093,845 BTC (10.581%)

• 10–100 BTC: 4,306,780 BTC (21.761%)

• 100–1,000 BTC: 4,342,868 BTC (21.935%)

• 1,000–10,000 BTC: 4,693,216 BTC (23.716%)

• 10,000–100,000 BTC: 2,309,654 BTC (11.671%)

• 100,000 BTC: 647,934 BTC (3.274%)

It is worth noting that the majority of large wallets (holding 1,000 BTC or more) are typically associated with exchanges, ETFs, and large organizations like MicroStrategy. Each of these large entities represents the collective ownership of thousands to millions of customers and shareholders.

December 5th marked a milestone as Bitcoin price first reached this level and took three more days to complete a daily candle close above $100k. This was a landmark event, reflecting not only the growth of the asset’s value but also the development of the economic network surrounding Bitcoin.

To date, the network has processed over 1.12 billion transactions, with a total transfer volume of $131.25 trillion, demonstrating the scalability and sustainability of the system. The number of Bitcoins that have been mined is 19.8 million, approaching the maximum supply of 21 million BTC, creating the scarcity factor that underpins the value of this asset.

Cumulative miner earnings reached $71.49 billion, which is not only an incentive but also an important contribution to securing the network. A deeper analysis shows the distribution of Bitcoin among diverse groups of holders, from retail investors to large institutions, demonstrating the widespread acceptance and increasingly important role of Bitcoin in the global financial landscape.

Bitcoin’s move past $100k is not just a price milestone, but a testament to its resilience, innovation, and irreplaceable role as a store of value and medium of exchange in the digital age. It is also a reminder of the potential for the future growth of the cryptocurrency ecosystem.

During this impressive market expansion, investors recorded a total of $1.27 trillion in profits and -$592 billion in losses on-chain (based on the difference between the buy and sell prices). The result is a cumulative net capital flow (Realized Cap) of $750 billion, underscoring the tremendous value that the Bitcoin network has captured over its lifetime.

This figure not only demonstrates Bitcoin’s strength as an investment asset, but also reflects how the network has become a vital part of the global financial ecosystem. With actual gains far outpacing losses, the data demonstrates Bitcoin’s long-term appeal, despite the large swings typically seen in the cryptocurrency market.

This cumulative $750 billion inflow is also a significant indicator of the confidence that investors have placed in Bitcoin. It represents not only money flowing into the network, but also a manifestation of the growing acceptance and use of Bitcoin globally.

The Bitcoin network has come a long way to becoming a global financial value transfer system, from its early days as an experiment to reaching the $100k price milestone on December 5, 2024.

In this report, we will look at the major milestones, technological advancements, and adoption trends that shaped Bitcoin, paving the way for its incredible growth and success.

Since the Genesis Block, a total of 873,304 blocks have been mined, with an average time to mine a block of 11.8 minutes.

However, block mining speeds have improved significantly thanks to the increase in hashrate, with the average time now dropping to around 9.6 minutes per block.

Because Satoshi Nakamoto valued CPU power, the initial mining time was long but ensured the network grew steadily.

During that same period, the Bitcoin network difficulty — measured in units representing the computational effort required to mine a block — has grown significantly.

After 418 difficulty adjustments (not counting periods without adjustments), the network difficulty has now increased to a whopping 446,331,432,498,125,300,000,000 .

This increase reflects the constant expansion of the computing power and security of the Bitcoin network.

From the early days when mining could be done with a regular CPU, the network has progressed to a stage where large-scale mining centers use specialized ASIC hardware to compete.

Conclusion and evaluation

Bitcoin’s journey to $100k is not just a milestone in terms of value, but also a testament to its remarkable growth from a small corner of the internet to a vital part of the global financial infrastructure. Since its Genesis Block, the network has matured significantly, reaching a $2 trillion market cap, surpassing silver in size, and processing a total of $131 trillion in value through 1.12 billion transactions.

The network has paid miners a total of $71.49 billion in value, or just over 3% of its market cap, as an input cost to maintain operations. This represents an impressive performance, with returns far exceeding the initial investment costs, demonstrating the economic efficiency and financial strength of the system.

With hashrate near an all-time high and a widely distributed holder base, Bitcoin is well-positioned to play an increasingly important role in global finance. Its robust infrastructure, growing adoption, and decentralization have cemented Bitcoin as a store of value and a strategic investment asset.

The $100k milestone is more than just a number, it is a symbol of Bitcoin’s maturation from a technological experiment to a global phenomenon. It is a clear testament to Bitcoin’s innovation, adaptability, and growing importance in reshaping the future of the financial system.

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