The Record-Breaking On-Chain Bitcoin Trading Volumes in January
In January, the on-chain Bitcoin trading volumes reached a record high, surpassing $1.2 trillion. This is the highest volume since September 2022. In December, the volumes had stopped at one trillion dollars, and in September 2023, they were below 600 billion.
The Boom in Bitcoin Volumes in January
In November 2022, the volumes were also around 1.2 trillion but dropped significantly later. They fell below 500 billion in December of that year and remained below 600 billion until February 2023. There was a small recovery in March when they rose above 700 billion and remained there until August.
In September 2023, there was a brief drop below 600 billion, but by October, they jumped to almost 800 billion. In November, they were nearly 900 billion, and finally, in December, they returned above one trillion.
These levels are similar to those of November 2020 when the last major bull run began. However, they are not comparable to the absolute monthly peaks of November 2021 during the speculative bubble.
The Events of this Period
The historical period described started in November 2020 with the beginning of the latest major bull run. The trading volumes of BTC in dollars remained consistently high throughout the year despite two phases of the bull run ending in April and November 2021.
The bubble began to burst in late November and on-chain volumes started decreasing in December. The collapse continued with various events like the implosion of the Terra/Luna ecosystem in May 2022 and the failure of Celsius in June.
Another collapse occurred in November 2022 with FTX’s bankruptcy. However, starting from January 2023, there was a significant rebound in the price of Bitcoin. From the end of October 2023, the crypto markets started to recover with a new small bull run.
December and January: Bitcoin Volumes
In December 2023, the increase in on-chain trading volumes was influenced by expectations for the approval of Bitcoin spot ETFs. In January 2024, the average transaction value increased, leading to higher on-chain trading volumes.
The average value per single on-chain transaction often exceeded $100,000 in January. The peak occurred on January 12th, with an average transaction value of almost $174,000.
The Problem of Fees
In November 2023, the average daily cost for a single on-chain Bitcoin transaction remained below $10. In December, due to the boom in transactions, the average cost per transaction exceeded $20 and even surpassed $30 in some cases.
In January, the number of daily transactions decreased compared to December, resulting in lower costs. Despite this, the traded volumes still grew because the average value per transaction increased. The issue of high fees in December has partially subsided but remains at high levels.
Hot Take: On-Chain Bitcoin Trading Volumes Reach Record High in January
In January 2024, on-chain Bitcoin trading volumes reached a record high of over $1.2 trillion. This is the highest volume since September 2022 and reflects a significant increase in average transaction values. While fees remain high, they have decreased compared to December due to fewer transactions recorded on the blockchain. The boom in volumes indicates growing interest and activity in the Bitcoin market. As Bitcoin spot ETFs were approved during this period, it contributed to the increase in on-chain volumes. The current levels are comparable to the levels seen during the previous major bull run in November 2020, highlighting the continued growth and potential of Bitcoin.
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