Summary My early-February call in Bitcoin and the Fidelity Wise Origin Bitcoin Fund ETF was poorly timed, but recent ETF inflows suggest improving investor demand for BTC. April's on-chain data shows a decline in Bitcoin's Monthly Active Addresses, indicating a dwindling user base, partly due to ETF adoption. Bitcoin mining sector faces profitability challenges despite high BTC prices, with global hash rate growth and low fees impacting long-term security and decentralization. Gold has outperformed Bitcoin since 2021, but recent demand flow data suggests a potential capital rotation favoring Bitcoin in the short to medium term. My early-February call for 'beast mode ' in Bitcoin ( BTC-USD ) and by extension the Fidelity Wise Origin Bitcoin Fund ETF ( FBTC ) was not well-timed. This was acknowledged later when I followed that piece up with a late-February article titled "Turns Out, Bitcoin's Beast Was a Bear." More recently, 'investor demand' for BTC has improved if ETF inflows are any indication. In this update, we'll look at April network data, the mining sector, and what (if any) relationship there is between Bitcoin and Gold ( XAUUSD:CUR ) that could foreshadow a larger capital rotation. On-Chain Data: April 2025 The on-chain metrics that I typically pay attention to when drawing my own assessment of Bitcoin's 'network health' are things like fees, daily active addresses, and transferred value. In April, Monthly Active Addresses came in at 10.9 million. This was flat month over month and down 14% year over year. Bitcoin DAAs vs MAAs (Token Terminal) The Token Terminal chart above shows Bitcoin user data expressed through both Daily Active Addresses (or DAAs) and Monthly Active Addresses (or MAAs). Though the trends are very similar, the MAA trend (green line) shows a peak in monthly active addresses in January 2021. Daily Active Addresses actually peaked in September 2023. The point is, we could easily argue Bitcoin is exhibiting a dwindling user base, since monthly unique addresses have been trending down through this halving cycle. Admittedly, some of this is due to 'adoption' taking place through ETFs rather than on-chain. We'll get into the ETF data in a later section. USD Transferred Value (CoinMetrics) At $9.9 billion in 30-day average transferred value, Bitcoin is still a highly functioning blockchain. However, the payment to miners for validating that transferred value continues to be underwhelming to say the least: Monthly Mining Fees (Token Terminal) At $15.7 million in fees for the month, April saw a 4% increase over March and a whopping 94% decline in full-month fees year over year. To be fair, April 2024 was the third-best month ever for Bitcoin miners from a fee-generation standpoint. But I can't stress enough that the lack of fees is a long-term problem for Bitcoin due to the limited supply of coins. Mining Industry Health It's easy to hand-wave away the importance of fees long term due to the fact that Bitcoin has always produced a new all-time high price following a halving event. In theory, the perpetual increase in the price of BTC offsets the reduction of fresh supply from block reward emissions. In reality, Bitcoin's price increase in this halving cycle arguably hasn't been enough to justify the global hashrate growth that we've seen since the halving in April 2024: Rewards USD vs BTC (mempool.space) The chart above shows Bitcoin mining rewards measured in both BTC (in yellow) and US dollars (in green). Yellow gets cut in half every four years. That matters less than the dollar-denominated rewards for miners, since mining expenses are denominated in fiat rather than BTC. A year after the halving in 2020, Bitcoin's dollar-denominated rewards were essentially at all-time highs. A year following the 2024 halving, Bitcoin's dollar denominated rewards are actually below that 2021 high. This wouldn't be as big of an issue for miners if the global hash rate was holding steady or even going down. The opposite is true: Data by YCharts Though it is admittedly off recent highs, Bitcoin's global hash rate has grown by 40% over the last twelve months. The result of which is a mining sector profitability figure that remains significantly depressed at just $49 per PHS/Day: Bitcoin Hashprice, 5 Year Trend (Hashrate Index) If you're looking for a reason why Bitcoin mining stocks are still well below their highs from the last cycle even with Bitcoin at $87k per coin, the chart above is a big part of your answer. To be sure, there are long-term implications to Bitcoin's security if mining can't be done profitability, and I'd wager one of those implications is the centralization of global hash. Consider that public mining companies can and have generally funded expansion through shareholder dilution rather than by efficiently running an operation. Smaller/private mining companies don't necessarily have that luxury. Unlike Gold, which does not require miners to exist for the movement/settlement of previously mined metal, Bitcoin's decentralized ledger does require validation from miners to create new blocks. This is one of the critical reasons why I don't think Bitcoin will overtake Gold in terms of market capitalization in my lifetime. But that doesn't mean the current setup can't favor Bitcoin for a capital rotation trade shorter to medium term. Rotation Trade Setup Gold has absolutely proven its value as a safe haven asset over the last three years. From the 2022 low to the 2025 high, Gold has more than doubled in price. For an asset with a multi-trillion market capitalization, this type of move in price is quite impressive. Gold has done so well since 2022, that we currently have a Bitcoin/Gold ratio that is below the 2021 peak of 36: Bitcoin/Gold Ratio (LongTermTrends.net) To be sure, this ratio did indeed make a new high of 40 in late 2024. But at the current 28 reading in the ratio, Gold has actually outperformed Bitcoin since November 2021. Even though Bitcoin has often been dubbed 'digital Gold,' the 30-day average correlation between the two had actually been negative for two straight months earlier this year. 30 Day Pearson (The Block) That has since reversed, and we currently find BTC and Gold with their tightest 30-day average correlation in 3 months. This comes with Gold beginning to show signs of temporary bull exhaustion and Bitcoin breaking out over technical resistance in late-April. Given the fact that Gold has benefited tremendously from ETF demand in the North American market since February, the last two weeks of demand flow data in April perhaps foreshadow a change in sentiment: Gold Demand Global Gold ETF Net Flow $m North American Net Flow $m North American % Week Ending 4/4 $2,218.6 $727.6 32.80% Week Ending 4/11 $4,678.2 $2,727.5 58.30% Week Ending 4/18 $3,433.6 $802.3 23.37% Week Ending 4/25 $1,742.4 $4.4 0.25% April* $12,072.8 $4,261.8 35.30% March $8,609.3 $6,537.9 75.94%
