Many Bitcoin Investors Took Profit In May 2023, Goldman Sachs Claims

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In a rapidly transforming digital landscape, Bitcoin and Ether, the two major cryptocurrencies, have exhibited divergent patterns in their respective on-exchange supplies. According to a recent analysis, the volume of Bitcoin on exchanges has plunged by 12%. Simultaneously, Ether’s supply has witnessed a marginal upswing, indicating distinct dynamics shaping these two digital assets.

An Analytical Glimpse into Bitcoin and Ether Adoption

In Goldman Sachs’ latest report, on-chain data for May reveals a rather complex panorama surrounding the adoption of Bitcoin (BTC) and Ether (ETH). There is a certain degree of stagnation in the shifts of Ether balances across various cohort groups. In stark contrast, a significant downslide of 31% was observed in the monthly counts of Bitcoin addresses with balances exceeding 100,000 BTC.

Bitcoin’s Spent Output Profit Ratio (SOPR) encountered several substantial surges during May. This surge peaked at unseen levels in the final month of 2020. This intense escalation implies that considerable profit-taking activities were underway in the spot markets, prompting speculation and debate within the financial sector.

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In the face of these tumultuous events, the number of Bitcoins stored on exchanges significantly decreased by 12%. In contrast, Ether’s supply experienced a modest increase, an intriguing observation made by the Wall Street behemoth.

Network Congestion and Its Impact on Bitcoin and Ether Transactions

Another noteworthy development in May was the network congestion impacting Bitcoin and Ethereum blockchains. Goldman Sachs accentuated this point in their report, stressing that this congestion significantly contributed to the drop in monthly address activity for Bitcoin and Ether. The respective declines were 13.8% and 16.7%, mainly due to users’ reluctance to engage with higher transaction fees.

Despite these obstacles, Bitcoin’s average mean hash rate continued its upward trajectory, reaching unprecedented heights in May. This key metric increased by 5.4% during the month, alongside an impressive uptick of 16.4% in miner revenues.

It is clear that Bitcoin and Ether, though part of the same cryptocurrency space, display varying behaviors in response to market pressures and changes. Close and continual monitoring of these trends and a comprehensive understanding of the associated factors will be essential for investors and market participants.

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