Bitcoin report for the first quarter of 2024

summary

• BTC price rose 69% month-on-month to $71,310, setting a new all-time high in April as the new halving cycle approached.

• The success of spot BTC ETFs is a driver of price action, with inflows exceeding $12 billion in Q1. Spot BTC ETFs currently hold 831,000 BTC, or $59 billion.

• Inscription transactions and fees fell 40% and 60% month-on-month. However, NFT exchanges still see daily sales of over $10 million. The April halving will bring the launch of the Runes token protocol and Epic SAT.

• Miner revenue (USD) increased 34% month-over-month, and miners are exploring Inscriptions and MEV as additional revenue sources. Some miners have formally conducted bulk sales to meet the needs of Ordinals builders.

• The TVL of programmable Bitcoin layers grew 127% month-over-month. Dozens of new layers are being built to scale Bitcoin and increase its programmability, many of which are exploring BitVM-based bridging and state verification.

Getting Started

Bitcoin (BTC) is the first consensus-based distributed peer-to-peer payment settlement network. Bitcoin (BTC) is the native asset of the Bitcoin blockchain and is the world's first digital currency without the control of a central bank or administrator. Bitcoin is often referred to as digital gold, and it has a predictable, stable, and autonomous monetary policy that gives it ideal value storage properties.

To ensure the security of its network, Bitcoin uses a Proof of Work (PoW) consensus mechanism to solve the "double-spending problem". PoW requires participants (miners) to contribute computing power to solve arbitrary mathematical puzzles in order to add new blocks to the blockchain. Bitcoin is rewarded to the miner who solves the puzzle first, thereby minting new Bitcoins.

Bitcoin has historically focused on enabling peer-to-peer payments and being a store of value, but has not been as focused on DeFi, NFTs, and other narratives enabled by programmability (i.e., expressive smart contracts and arbitrary computation). Instead, these narratives have been deferred to other networks. However, Bitcoin is now experiencing a renaissance in programmability, thanks in large part to two recent innovations: Ordinals and BitVM. Both of these innovations leverage off-chain indexing or computation, and neither makes any changes to the core protocol. Ordinals highlighted the need for additional functionality, and then BitVM made expressive and trust-minimized L2s seem possible. These innovations have sparked a frenzy of experimentation with on-chain assets and modular layers.

Key Metrics

Financial Analysis

BTC price increased by 68.78% month-on-month to $71,310 at the end of Q1, a new all-time high. This price increase has increased BTC's market cap dominance to 49.7% in March 2024. This growth in market cap dominance is typical of the start of a new halving cycle, as BTC tends to lead other cryptocurrencies. Multiple factors have contributed to the price increase and record highs, including the expectation of the supply halving in April 2024.

However, the launch of the spot BTC ETF in January was likely the biggest catalyst, as a total of $12.04 billion (212,000 BTC) of inflows occurred in Q1. ETFs will be explored further in the institutional analysis section.

In the fourth quarter of 2023, inscription activity fees increased 699.4% quarter-over-quarter to $502 million. After a 41.9% drop to $291 million in the first quarter, this inscription rush once again proved inconsistent. Despite the overall decline in fees, inscription-related transactions still accounted for 18.4% of overall transaction fees, down from 25.8% in the fourth quarter of 2023.

Bitcoin pays about $63 million in security fees per day (900 BTC per day at $70,000). Fees averaged $3.2 million in Q1, or 5% of Bitcoin’s security budget. For context, in December 2023, fees were about 50% of the security budget. 2023 is the first year in Bitcoin’s history that the annual security budget (relative to market cap) is higher than the year before (from 1.8% to 1.9%), suggesting that the economics are potentially sustainable.

Currently, inscriptions alone cannot reliably cover Bitcoin’s security budget. However, other protocols are further exploring the use of arbitrary block space in Bitcoin. Their innovations could become an ongoing demand driver and revenue source, as discussed in the layered analysis section below. The fees generated by this demand will become increasingly relevant to Bitcoin’s overall revenue, especially as BTC issuance (and therefore the security budget) is set to halve from 6.25 to 3.125 in April 2024. After the halving, current fee volumes will cover as little as 2.5% of the security budget instead of 5%.

Network analysis

Average daily transaction volume and daily active addresses fell 15.3% and 4.7% quarter-over-quarter, respectively. The ratio of transaction volume to active addresses fell for the first time in seven quarters and nearly two years. These changes suggest that the decline in transactions may be due to a decrease in activity from bots or "super users" (users who trade frequently and account for a large portion of activity). Regardless of user composition, this behavioral shift coincides with a decline in inscription-related activity and fees.

Inscription-related activity on the network first picked up in February 2023, resulting in a 44% quarter-over-quarter increase in transactions between Q1 2023 and Q2 2023. While activity in Q1 2024 declined quarter-over-quarter, it was still up 36% year-over-year from the beginning of the year.

Average block size and transaction count generally remained flat from 2022 to 2023 until Ordinals first gained attention in February 2023. Overall, average block size has stabilized after increasing in early 2023. Additionally, transaction activity has not seen a significant change. Any significant increase will not occur until the end of Q2 2023. Therefore, the increase in average block size may come from the type of transaction (i.e., inscriptions) rather than the volume of transactions themselves. The impact of inscriptions can also be seen in other network metrics, such as Bitcoin's pack memory pool.

Ordinals builders and Bitcoin miners have been approaching the maximum size of 4 MB blocks enabled by Segwit. First, Luxor mined a 3.96 MB block on February 1, 2023. More recently, on March 2, 2024, Marathon mined a 3.99 MB block. Subsequently, F2Pool mined a 3.97 MB block on March 30, 2024.

Mining and safety

Overall, 7.6% of miner revenue came from fees in 2023, compared to 1.6% in 2022. So far in 2024, 6.5% of miner revenue has come from fees. While this is down slightly from 2023, it is down significantly quarter-over-quarter from Q4 2023, when 11.6% of miner revenue came from fees. The larger the percentage of revenue that comes from fees rather than issuance, the more economically sustainable the network will be, as issuance will continue to decline until it reaches zero.

The block reward will be halved from 6.25 BTC to 3.125 BTC at block 740,000, which occurs in April 2024. Since revenue comes almost entirely from this block reward, miner revenue denominated in BTC will be almost cut in half by the second quarter of 2024. The change in revenue denominated in USD is more difficult to estimate due to BTC's price action.

MEV

Another revenue channel for miners that has grown recently is Maximum Extractable Value (MEV, also known as Miner Extractable Value). MEV is more prominent on fully expressed networks such as Ethereum. There, more sophisticated block builders can reorder transactions on decentralized exchanges and other applications to create profits (e.g., sandwich attacks). However, the recent introduction of alternative tokens by meta-protocols such as Ordinals has created MEV opportunities for Bitcoin miners. Because these MEV opportunities are relatively new, the ecosystem lacks clear heuristics for measuring MEV.

NFTs create consistent MEV opportunities where miners can arbitrage prices between markets, or simply get ahead of others trying the same thing. Many MEV activities, especially PSBT mempool sniping, can also be performed by standard users, although sophisticated block builders can easily front-run such user activities.

MEV is controversial in Bitcoin because the increase in MEV opportunities, such as those created by Drivechains, could cause already competitive mining operations to adopt MEV strategies. This could come at the expense of smaller miners who cannot allocate resources to MEV strategies, ultimately leading to increased centralization. This concern is not relevant to other layer models, such as the Rollup concept, where MEV is isolated from the layer's collators. As with Ethereum, L2 collator MEVs do not typically percolate to L1 validators.

Hash rate

The economic impact of the issuance halving in Q2 2024 is particularly important in terms of hashrate. As hashrate grows, miners' profitability decreases (assuming a constant Bitcoin price). Hashrate represents the security of the Bitcoin network. Q1 saw a 19.0% increase from Q2.

As Bitcoin programmability has gained more attention and the ecosystem has grown, hashrate has become increasingly commoditized. Marathon, a large mining company, launched Slipstream, which allows customers to rent Marathon's hashrate and create their own blocks. It can also be described as a private memory pool as a service, and it has proven to be profitable. Other miners are also exploring this service, including Terra Pool. Decentralized hashrate markets have also emerged, such as Lumerin DEX on Arbitrum. This strategy of accepting non-standard block construction fees, also known as out-of-band fees, is not new to mining, there are just new incentives.

As the use of inscriptions and inscription-based meta-protocols (such as sequence numbers) increases, the need for such services is growing. Users have been circumventing the standard rules of Bitcoin Core by directly using hashrate providers (miners) to create blocks. For example, a single 3.9 MB transaction would violate the standard rules of Bitcoin Core (the main client software that runs a Bitcoin node) and would not be picked up through the mempool, but would be perfectly acceptable according to the consensus rules of the Bitcoin network itself.

Censorship

One side effect of inscriptions is UTXO state bloat, which could indirectly lead to concerns about decentralization and, in extreme cases, initiate censorship in response. Since the beginning of 2023, the number of UTXOs on Bitcoin has increased by 102% to over 170 million. Part of this growth comes from BRC-20 creating a new UTXO on every transfer, which helps increase the unmodifiable UTXO set. Because this state bloat requires more physical resources from a full node, it could ultimately impact decentralization (i.e. the ability of regular users to operate a node).

Some members of the Bitcoin community view inscriptions as spam and an attack on Bitcoin due to the state inflation effects on the network and the general introduction of new asset types. Not all Bitcoin spam (i.e. funny content) is the same, but it will be rejected by some users. The OCEAN mining pool raised funds in Q4 2023 and announced that it will filter/censor inscription transactions and consider them an attack on the network. However, other transaction types, such as coinjoins, also meet their criteria and are excluded from the pool.

The OCEAN pool has only created a few blocks, but it represents the extent of the community disagreement on the inscription. The Monero community has already successfully implemented a patch in Q2 to reduce the amount of free space and effectively ban the minting of NFTs on its own network. Other networks have also faced their own "issues" with BRC-20 inspired tokens. Avalanche, NEAR, Solana, and others have all experienced major spikes in activity, and Toncoin and Arbitrum have even seen outages. BRC-20 on Bitcoin can be filtered out, front-run, or forked away, but the majority of the Bitcoin community seems interested in preserving the asset class. This sentiment can be demonstrated through network activity indicators, community sentiment, and accepted mining fees.

Historically, Bitcoin has gone through many versions of censorship beyond the OP_Return controversy. Major mining pools have been found to be complying with OFAC sanctions multiple times. However, there is an important distinction between a miner that does not include certain transactions in its own blocks and a miner that refuses to build on another miner’s block that includes “prohibited” transactions. The latter can ultimately break consensus stability. In Q4, the absence of OFAC-scrutinized transactions, or the orphaning of blocks containing them by some of the largest miners, posed even more serious concerns about Bitcoin’s neutrality.

Token Analysis

Bitcoin saw new innovations in 2023 through inscriptions, leveraging SegWit, and the Taproot upgrade. Ordinal Theory was created in late 2022, giving birth to the first inscription-based meta-protocol, Ordinal. The surge in popularity of Ordinals reveals a strong interest in NFTs, memecoins, and overall additional functionality in the Bitcoin ecosystem.

Ordinals indexed single satoshis (sats) and arbitrary data (images, text, etc.) inscribed on them, effectively creating fully on-chain NFTs. Soon after, alternative BTC-derived asset types (whether based on or inspired by ordinals) emerged. BRC-20 is a “fungible” Ordinals. Due to the inherent non-fungible nature of Sat (when indexed) and the account-based accounting model used to index them, it is more accurate to say that they are non-fungible, like fractional shares of NFTs.

BRC-20s

Average daily registered transactions decreased 40.4% month-over-month. However, daily inscription volume still increased 1,464.3% year-over-year. While alternative asset types and token standards such as Stamps did contribute to activity, BRC-20 has been the primary driver of overall inscription activity. Dominance declined for the second consecutive quarter in Q1, with BRC-20 volume down 51.1% month-over-month and other inscription volumes up 14.2% month-over-month.

As of the end of Q1, ORDI was the largest BRC-20 token by market cap, ranking 93rd among all networks (down from the top 50 in Q4 2023). There are multiple marketplaces for Ordinals (BRC-20 and NFTs), such as MagicEden, Unisat, and ALEX’s B20 DEX, with more in development.

The urgency around BRC-20 token issuance has created a high-fee environment as users attempt to outbid each other. Certain inscription types, such as images, are expensive (relative to text). However, BRC-20 remains the inscription type that contributes the most to total inscription fees due to its higher transaction volume and minting behavior.

NFT

In terms of daily transaction volume, Bitcoin NFT trading is already competitive with or even surpassing the established NFT ecosystems on Ethereum and Solana. Bitcoin has yet to challenge these networks on other NFT metrics, such as daily transactions (8,000 for Bitcoin, 25,000 for Ethereum, and 117,000 for Solana in Q1) or unique buyers/sellers (5,000 for Bitcoin, 9,000 for Ethereum, and 17,000 for Solana).

Since BRC-20s are also Ordinals, they are sold on some NFT marketplaces and included in some NFT metrics. However, many users view BRC-20s as fungible, so comparisons to DEX volume may be more accurate. By 2024, Bitcoin's NFT sales will not even rank in the top ten of all network DEX sales.

In the first quarter of 2024, Magic Eden became the dominant player in the Bitcoin market in terms of both sales and trading volume. Magic Eden's sales and trading volume increased by 641% and 221% month-on-month, respectively. The top NFT series by market value are NodeMonkes and Bitcoin Puppet, with 4,700 BTC and 2,400 BTC, respectively. Both are profile picture (PFP) projects, although the latter has an accompanying BRC-20, PUPS.

Other series have also launched products with specific goals. The Quantum Cats project was started by Taproot Wizards with the explicit purpose of funding and organizing a Bitcoin soft fork. The project aims to drive discussion and adoption around opcodes (i.e. instructions in Bitcoin Script) for connecting other instructions, op_cat, and then eventually integrating them. This approach is a unique medium for coordination around technology upgrades and circumvents parts of the traditional path of Bitcoin Improvement Proposals (BIPs).

Some Ordinals builders have innovated with inscriptions. The limitations of Bitcoin’s programmability inspire developer creativity, not stifle it. Endpoints and properties on Ordinals cannot be changed, but they can be made dynamic through commitments and “recursion.” Commitments involve including symmetric cryptographic properties that are later disclosed on-chain, similar to a commitment to publish a verifiable random function. By choosing whether to disclose commitments, the coin can “evolve” and be guided through a preset path. Dynamics can also be achieved through recursive inscriptions and re-inscriptions. Recursive inscriptions are a misnomer, as they are not truly recursive, but they can point to properties of another inscription. Re-inscriptions involve adding more data to an inscription, but not overwriting it. Re-inscriptions on sats used as recursive inscription endpoints allow the network to be used as a dynamic, write-only database.

Runes

Runes is a highly anticipated new fungible token standard that will be launched in April at the halving. Unlike BRC-20, Runes operates on a UTXO model (the accounting model used by Bitcoin) rather than an account-based model. This enables greater flexibility and theoretically introduces the ability to integrate Runes tokens into state channels such as the Lightning Network or client-side verification (CSV) environments such as RGB.

Runestone is the largest Ordinal collectible by market cap at 5,300 BTC and is a placeholder project for the Runes token. There are other placeholder projects built on the current standard, such as RSIC.

Due to the higher overall value of the Runes Placeholder and Ordinals projects, there is speculation that the first block of the new era (the April halving) will be reorged as a form of MEV. A reorg involves the discovery of a new longest chain due to multiple miners creating blocks at the same time. In the case of the halving, a reorg could occur due to miners intentionally building on top of blocks they know are not the first halving block. Doing so would build a longer chain that could surpass the consensus longest chain. In this case, miners would forgo rewards from multiple blocks in the process, but could make a profit if users paid millions of dollars for block 840,000 (the halving block).

The value proposition of owning the rights to block 840,000 would be the right to mint some of the first Rune tokens (and collect Epic sats, explored further in the Rare Sats section). Early Ordinals projects became valuable because of their early timing (e.g., sub1k and sub10k). Conversely, the cost of a reorg could make it an easy financial decision for miners with the resources. The concept of miners selling block rights has been established and formalized by various mining pools and companies, as discussed above in the “Mining and Security” section.

Rare

Another outcome of the Ordinals theory is Rare Satoshis, which are Satoshis with some associated history, almost like organic NFTs, with built-in metadata, broken down into shares, and can be traded like fungible tokens. Since Sats are tracked through consensus methods, users can identify specific Sats with special characteristics, such as belonging to certain wallets, being mined by certain people, or being spent in certain events. Rare Satoshis associated with events or history include:

• Pizza: 10,000 BTC used to buy two pizzas in 2010;

• First transaction: From the first Bitcoin transaction, Satoshi Nakamoto sent 10 BTC to Hal Finney;

• Satoshi: SatS mined by Satoshi.

The other rare Satoshis are special not because of their use, but because of their positioning according to the Ordinals theory.

• Palindrome: Ordinals The same sats forward and backward;

• Alpha: Bitcoin’s first sat;

• Omega: Bitcoin's last sat;

• Epic: The first Bitcoin-era sat.

There are currently no Epic sats for sale, but the first batch of sats from each difficulty period (two weeks for Epic sats, not four years) typically sell for multiple BTC. A new Epic Sat will be created during the mid-April halving, and will likely be very valuable on the secondary market. Situations like this could also affect the first block of the epoch and the feasibility of the reorg battle for the runes.

Layer Analysis

The excitement and demand for programmability has moved beyond the base layer meta-protocols and into the world of the Bitcoin layer (i.e. protocol extensions or adding more functionality to Bitcoin). BitVM opens the door to new bridge mechanisms and ideas for enforcing transaction validity. BitVM is a strategy for performing arbitrary computations anywhere and then verifying them on Bitcoin. It is important to note that BitVM is an abstract protocol, not a specific instance of a protocol; builders can implement BitVM-style verification for a variety of tools or protocols, such as bridges, Super's 8-bit CPUs and Tapleaf Circuits, or Blake3 hash lock verification.

While some dimensions of Layer 2 (L2), such as data availability, are simpler, they still require some innovation to scale to support dozens of layers. Until recent developments (i.e., BitVM), many believed that features such as the aforementioned trustless bridging and enforced transaction validity were impossible without soft forks (i.e., backwards-compatible protocol upgrades).

This development sparked a frenzy around Bitcoin layers, dubbed “Bitcoin L2 season.” Today, the vast majority of Bitcoin layers are not true L2s, with a few exceptions like the state channel-based Lightning Network. True L2s are primarily defined by unilateral exits. The rest are primarily sidechains, working on less custodial and more Bitcoin-integrated models, such as Rollups, as the technology becomes available.

Programmable Layer

In Q1, existing Rootstock and Stacks led the programmable layers in terms of TVL, at $202 million and $179 million, respectively. Newer layers BOB and Merlin saw incredible growth in Q1, with BOB exceeding $100 million in TVL in its first week of live deposits and Merlin reaching $92 million in TVL at the end of the quarter after launching in February. BOB is not live yet, but it does have a points program for deposits. Merlin has a similar strategy, launching a deposit points program before launching. Other layers in the mainnet include the core chain (EVM sidechain) and liquidity (partially programmable federation sidechain).

Most of the growth in TVL comes from non-BTC assets, as Rootstock and Stacks only have about 3,000 and 300 BTC locked, respectively. This is far less than the 5,000 BTC locked in the Lightning Network, and far less than the BTC locked in alt-L1. Ethereum and TRON together host nearly 300,000 BTC, while other networks such as Avalanche and BNB host thousands of BTC each.

The total number of layers in mainnet, testnet or just announced is over 40. Many layers, such as Citrea, intend to launch as Rollups and open source the BitVM implementation in the process. Similar to the Ethereum L2 space, many projects, such as Bitlayer and Molecule, are exploring execution environments other than the EVM, such as Cairo or Solana VM. Even mining companies are getting in on the action, with Marathon announcing its own layer, Anduro.

Ultimately, there is still a lot of work to be done before a true Bitcoin Rollup can be achieved. BitVM is currently the most anticipated strategy, but it still cannot achieve a unilateral exit. The first iteration of BitVM detailed a bridging strategy with a joint 1-of-N trust assumption. Recently, in March 2024, BitVM 2 was released, which will implement a permissionless 1-of-N trust assumption. This model will achieve significant improvements in risk and custody, as permissionless verification is closer to the optimistic/fraud-proof model popular on Ethereum.

BitVM is not a panacea for trust-minimized bridges, and BitVM-based bridges are not yet in use while the community is still exploring the sustainability of various models. In addition, soft forks are exploring multiple features (such as CAT, CTV, TXHASH, and CSFS) that will enable contracts and other ways to easily activate true L2. Even so, any new features will be complementary to existing strategies, not competitive. Given the notorious difficulty of organizing Bitcoin forks, BitVM remains one of the most promising paths to a more sovereign bridge today.

Lightning and State Channels

The Lightning Network’s state channel-based scaling method was first introduced in 2015 and has gradually become the most popular scaling solution. The Lightning Network uses the built-in features of Bitcoin L1, such as multi-signatures and hashed time lock contracts (HTLCs), to facilitate unilateral withdrawal of BTC locks and unlocks.

In 2023, the adoption of the Lightning Network by custodians increased. While this increased accessibility for users, it also exacerbated the already high level of centralization of the Lightning Network. Over 90% of transfers and addresses are made through centralized solutions, and self-custody and self-escrow have proven to be too cumbersome for many users.

The Lightning Network exists as an off-chain network on top of the “Bitcoin L2 trilemma”. On off-chain networks, the risk of self-custody and self-hosting is that users lose funds when they go offline. Hedgehog is another state channel model that supports asynchronous payments and alleviates some of the above issues. There are other models that iterate or improve on various aspects of the Lightning Network, such as Ark, which provides privacy.

A class of vulnerabilities known as replacement cycle attacks were disclosed by Bitcoin/Lightning Network developers in October 2023. Fixing these vulnerabilities requires a soft fork. Even without the additional features that most other Bitcoin layers aspire to provide (such as smart contracts or privacy), the Lightning Network has its own protocol issues to deal with.

ETF Analysis

On January 10, 2024, 9 new spot ETFs and 1 ETF conversion were approved and launched. These events marked a critical moment in the U.S. government and traditional finance's push for the legalization of BTC. By any measure, these ETFs have been very successful, attracting more than $12 billion in inflows in the first month.

In less than a week, BTC ETFs surpassed silver ETFs in terms of AUM, but still lag far behind gold ETFs at over $9 billion. Next, institutions are eclipsed, as the largest institutional holder, MicroStrategy, holds only 215,000 BTC.

Overall, ETFs saw inflows of $12.4 billion, or 212,000 BTC, in the first quarter, bringing total AUM to 831,488 BTC. Ignoring GBTC, which already exists as the BTC Trust, the new nine ETFs pulled in 493,807 BTC in the first quarter. As advisors will gradually be allowed to sell these new funds to clients, ETF usage will only increase through the rest of 2024.

For reference, total inflows across all ETFs in 2023 were approximately $598 billion. The two best-performing BTC ETFs, IBIT and FBTC, saw inflows of $13.9 billion and $7.5 billion, respectively, in the first quarter of 2024. Despite hundreds of active ETFs, only nine attracted at least $12 billion in inflows throughout 2023, let alone a single quarter.

Here’s how the top nine ETFs with inflows starting in 2023 performed in the first quarter of 2024:

• VOO: $23.9 billion

• IVV: $13.9 billion

• VTI: $8 billion

• AGG: $4.8 billion

• BND: $3.4 billion

• JEPI: $1.6 billion

• RSP: $1.2 billion

• TLT: -$350 million

• SPY: -$9.1 billion

The level of on-chain activity varies across ETF issuers, but in general, TradFi incumbents are really paying attention. After receiving community feedback, the Bitwise team upgraded the wallet format used for funding. With its publicly released on-chain address, multiple users actually sent sats to it. The team announced that sats sent to their address will be added to NAV and owned by shareholders, with the exception of tokens from OFAC-approved addresses. Like almost all other issuers, Bitwise uses Coinbase as its custodian. With the exception of Fidelity and VanEck's funds, more than 80% of BTC ETF assets are managed by Coinbase.

Supply held by exchanges and miners fell 1.7% and 0.5% month-over-month, respectively. BTC ETFs have about 50% of the AUM of exchanges or miners and have only been around for a few months. These relationships may change after the halving, especially for miners who are collecting that issuance.

Summarize

Ordinals highlighted the need for additional functionality, and then BitVM made expressive and trust-minimized L2 look possible. These developments sparked the current renaissance of programmability in the Bitcoin ecosystem. In the first quarter, the market capitalization of Bitcoin-related tokens exceeded $1 billion, and daily NFT sales exceeded $10 million, driving network activity and fees.

Ecosystem builders are working to introduce more functionality through various architectural layers of Bitcoin. Miners are directly participating in the new revenue streams created by programmability, and some are even launching their own layers.

In addition to all of these new ways to leverage BTC on Bitcoin or other decentralized networks, TradFi has also made inroads into BTC with new spot ETFs, which saw inflows of over $12 billion in the first quarter, crushing other ETFs. These leveraging methods will likely continue to be adopted in 2024 as they mature and new institutions participate.