Bitcoin On-Chain Activity Reaches Historic Peaks, Says Analyst
An analyst specializing in cryptocurrency markets has highlighted the current on-chain activity of Bitcoin. According to the analyst, two key metrics—the number of long-term Bitcoin holders and the volume of transactions on the Bitcoin blockchain—have reached all-time highs.
The number of HODLers, or Bitcoin holders who seldom sell their assets, has surged to unprecedented levels. Additionally, the number of transactions taking place on the Bitcoin blockchain has also soared, indicating a robust and active network despite Bitcoin’s subdued market price.
However, the economic value of Bitcoin transactions has declined significantly. The median value of each Bitcoin transaction has dropped by 98.4% over the past three years, reaching its lowest point since 2013. This suggests that while blockchain activity is flourishing, Bitcoin’s economic value appears to be diminished.
Key Metrics Shared by the Analyst
The analyst provided a breakdown of several metrics related to Bitcoin’s on-chain activity:
- Long-term holders are at an all-time high.
- Transaction volumes are at an all-time high.
- Active entities on the blockchain are in the 85th percentile compared to the last five years.
- The value of Bitcoin transactions has decreased by 30% over the past 12 months.
- The median transaction value stands at $7.72, the lowest since 2013.
The analyst also emphasized the increasing prevalence of Bitcoin inscriptions—a feature that allows additional data to be included within individual units of the cryptocurrency (satoshis). This feature has been driving transaction activity on the Bitcoin network, indicating its importance and longevity.
Analyst Warns of Headwinds for Bitcoin
The analyst previously warned that Bitcoin is currently facing headwinds due to a global liquidity crunch. This lack of liquidity has historically aligned with the expansion and contraction of Bitcoin’s market cycles. Unless there is a reversal in the global liquidity situation, Bitcoin’s price is unlikely to experience a significant uptick and may even trend downward.
Featured Image via Midjourney
Hot Take: The Growing Divide Between Blockchain Activity and Economic Value
While Bitcoin’s on-chain activity continues to thrive, there is a growing concern over the declining economic value of its transactions. The number of long-term HODLers and transaction volumes are at all-time highs, indicating a strong network. However, the median value of each transaction has plummeted by 98.4% in the past three years.
This discrepancy suggests that while there is significant activity on the blockchain, the economic value generated by these transactions has diminished over time. It raises questions about the sustainability and utility of Bitcoin as a digital currency. As the global liquidity crunch persists, it remains to be seen whether Bitcoin’s price will see any substantial increase or continue on a downward trend.
By
By
By
By
By
By