Bitcoin 2023 Year in Review: Price Recovery, Application Innovation, Mining Recovery

2023 is a year of both recovery and innovation for Bitcoin. Against the backdrop of increasing global economic uncertainty, Bitcoin has emerged from the downward trend of 2022 and entered a steady upward channel. At the same time, the rapid development of the Ordinals protocol has injected new vitality into the Bitcoin ecosystem.

The trading market performs strongly

Bitcoin's annual increase reached 158.06%, rising from $16,500 at the beginning of the year to over $42,700 by the end of the year. The upward trend is clear and strong, with an average daily fluctuation of no more than 5%.

Around April 19 next year, Bitcoin will迎来第四次减产, which may provide momentum for the coin price to rise. Historical data shows that halving and coin price increases usually occur simultaneously.

Despite the significant increase in coin prices, trading volume is on a downward trend. The average daily trading volume for the year is approximately $18.92 billion, with the highest trading volume in the first quarter and a slight recovery in the fourth quarter.

The futures market remains active, with the total open interest increasing by 64.02% this year, but the leverage ratio has decreased.

The Bitcoin MVRV annual average is about 1.40, indicating that the market as a whole is in a state of overvaluation. 87.76% of the chips are in profit, which is much better than last year. The profit level of long-term holders is higher than that of short-term holders.

The correlation with traditional financial markets has increased, but overall it still does not constitute a significant correlation. It shows a weak positive correlation with the Dow Jones Index and a weak negative correlation with the Dollar Index.

On-Chain Fundamentals Divergence

The number of active addresses increased slightly by 3.51%, with a monthly average of 948,700. September and November were the most active months, with a daily average exceeding 1 million.

User asset distribution accelerates micro-capitalization, but the holding period of coins tends to be long-term. Addresses with balances ranging from 0.001 to 1 BTC account for 97.24%, and this is showing significant growth. The proportion of long-term holdings exceeding 2 years is increasing.

The number of transactions and the total transaction amount show divergence. The cumulative number of transactions for the whole year exceeded 145 million, a year-on-year increase of 63%. However, the total transaction amount was only 47.4498 million BTC, a year-on-year plunge of 2547%.

Transaction fees surged by 367.88%, reaching $641 million. The average transaction fee is $3.77, an increase of 146.41% year-on-year.

Total mining revenue exceeds 9.8 billion dollars

The total annual revenue from mining is approximately $9.849 billion, with the highest monthly revenue in November reaching $1.158 billion. The proportion of fees showed two peaks, reaching 19.26% in December.

The mining difficulty has increased by 90.35%, and the average daily computing power across the network has grown by 106.27%. The increase in computing power is less than the increase in coin price, and the mining industry is expected to achieve excess returns.

The annual mining revenue per unit of computing power has increased by 85.21%. Overall, this year's mining income is considerable.

Significant Innovation in the Application Layer

The Ordinals protocol has sparked a surge in inscriptions, generating over 49.46 million inscriptions in total. There were two peak periods throughout the year.

BRC-20 tokens have become a growth engine. After April, the number of text-based inscriptions far exceeds that of image-based ones.

The TVL of Bitcoin DeFi grew by 211.46%, reaching 299 million USD. The share of the Lightning Network has decreased, showing a trend of ecological diversification.

Overall, Bitcoin made significant progress in the trading market, on-chain fundamentals, mining, and application levels in 2023, laying the foundation for further innovation in the future.