Bitcoin fundamentals promise bright future

Jun

Bitcoin fundamentals promise bright future

#Bitcoin, #Blockchain, #Crypto, #Cryptocurrency

News

Key metrics like active daily addresses and hashrate are in as strong uptrends as price.

As the price of bitcoin has tripled since the December low of $3,100, so too have the fundamentals that indicate the overall health of the Bitcoin and crypto ecosystem improved dramatically.

These metrics show a picture of increasing organic adoption among miners, everyday users and HODLers, pointing to a bright future over the coming months and years.

Active addresses

Recently, the number of daily active addresses – Bitcoin addresses that either sent or received a transaction – topped one million. Data from analytics firm CoinMetrics.io shows that active addresses have been steadily rising. Starting the year around 500,000 per day, it touched 1 million last week for the first time since January 2018, and looks set to stay consistently above that level within a month. Even at the current rate of increase, however, it is likely to be towards the end of the year before active addresses hits December 2017’s all-time high of 1.3 million.

Hashrate

Meanwhile, hashrate continues to rise, indicating that more miners are investing in more powerful hardware. This not only shows the security of the network, but the optimism that miners have in Bitcoin: since they will not see ROI for many months at least, it shows they have confidence in the digital currency’s long-term future.

Hashrate is a lagging indicator because of this factor. Hashrate started to decline in September 2018 as mining became unprofitable for many miners. Like price, it bottomed in December 2018 and, like active addresses, it has doubled since then – reaching a new all-time high of 65 million TH/s.

HODLers

Finally, analysis of UTXO age shows that there are an increasing number of HODLers. Willy Woo’s charts suggest the proportion of all coins that have been held for a year or more is approaching an all-time high. These coins will be redistributed at higher prices, having been accumulated in the bear market. This is, anecdotally, supported by increased institutional interest, since larger investors are less likely to trade on a short-term basis. Coinbase Custody recently announced it had $1.3 billion under management, and expected this sum to reach $2 billion soon. ‘There’s a narrative out there that institutional-grade services don’t exist in crypto. This isn’t true. Coinbase Custody is a regulated, insured and secure custodian. We have $1.3bn AUC and expect to hit $2bn soon. We have no intention of stopping there.’