Bitcoin Shows Historic Strength in On-Chain Metrics, Says Bloomberg Crypto Analyst
In a recent update on Bitcoin’s on-chain activity, Jamie Coutts, a crypto market analyst at Bloomberg Intelligence, highlights two key metrics that indicate historic strength for BTC. Firstly, the number of HODLers (BTC holders who rarely sell) is at an all-time high. Secondly, transactions on the Bitcoin blockchain have also reached all-time highs. However, despite this positive activity, Coutts notes that the median value of each transaction has decreased by 98.4% in the last three years, reaching its lowest point since 2013. This suggests that while blockchain activity is increasing, BTC’s economic value remains low.
Bitcoin Inscriptions Dominate Transaction Activity
Coutts also points out that Bitcoin inscriptions, which allow users to embed extra data into individual satoshis, have been dominating transaction activity on the network lately. This indicates that inscriptions are more than just a passing trend and are becoming increasingly popular among BTC holders.
Inscriptions Generate Millions in Fees
According to Dune Analytics, Bitcoin inscriptions have generated over $56 million in fees since their inception. This further emphasizes their significance and potential for long-term usage within the crypto space.
BTC Under Pressure from Lack of Global Liquidity
Despite the positive on-chain metrics, Coutts notes that Bitcoin is currently facing pressure due to a lack of global liquidity. Historically, this has coincided with Bitcoin’s market cycles as they expand and contract. Until there is a reversal in global liquidity contraction, Coutts believes that it is unlikely for Bitcoin to experience significant price increases and suggests that it may even decline further.
Hot Take: Bitcoin’s On-Chain Activity Reflects Strength Amidst Bear Market
Bitcoin’s on-chain metrics, including the high number of HODLers and record-breaking transactions, indicate strength and resilience in the face of a bear market. However, the decline in the median value of each transaction and the pressure from a lack of global liquidity pose challenges for Bitcoin’s economic value and potential price growth. It remains to be seen how these factors will impact BTC’s future performance.
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