Bitcoin Saw Heavy Profit Taking in May: Goldman Sachs

On-chain statistics for May show a mixed picture regarding bitcoin (BTC) and ether (ETH) adoption, Goldman Sachs (GS) said in a report on Monday.

Changes to ether balances across cohort groups have been largely unchanged, but bitcoin addresses with balances of more than 100,000 BTC seeing a monthly decrease of 31%, the report said.

The spent output profit ratio (SOPR) for bitcoin, which indicates the degree of realized profit, saw a number of spikes during the month, reaching levels not seen since December 2020, “suggesting that considerable profit taking has taken place in the spot markets,” the bank said.

The amount of bitcoin held on exchanges saw a steep decline of 12%, while ether supply saw a slight gain, the wall street giant noted.

Network congestion across both the Bitcoin and Ethereum blockchains was also a key focus in May, the bank said. This caused monthly address activity for bitcoin and ether to fall by 13.8% and 16.7% respectively, as user activity was deterred by higher transaction fees.

The bitcoin average mean hash rate continued to push past it’s all time high in May, gaining 5.4% during the month, with miner revenues increasing by 16.4%, the report added.

Hashrate refers to the total combined computational power that is being used to mine and process transactions on a proof-of-work blockchain, such as Bitcoin.