Bitcoin Fundamentals Are Improving Over Time Says Anthony Pompliano
Although Bitcoin (BTC) and virtual currencies have been in a bear market since the year, the fundamentals behind Bitcoin seem to be improving over time. According to Anthony Pompliano, founder and partner at Morgan Creek Digital, Bitcoin’s fundamentals are strengthening and says to enthusiasts not to be distracted by its price.
Bitcoin's fundamentals are strengthening. Don't let the price distract you.
The best performing asset in the last 10 years isn't going anywhere.https://t.co/avY2WrA1q0
— Pomp 🌪 (@APompliano) November 30, 2018
In an article published at Off The Chain, he shows that there are different characteristics of Bitcoin that show that it is improving over time. Some of the things he mentions are the number of blockchain wallet users, the cost per transaction, the number of confirmed transactions per day among many other things.
Bitcoin went from $20,000 in December 2017 down to $3,500 dollars a few days ago. This represents a price decrease of more than 80% during this year. However, there are some virtual currencies that lost more than 95% of their price. Indeed, some tokens launched during Initial Coin Offerings (ICOs) disappeared from the market.
He has also mentioned that mainstream media believes that Bitcoin and virtual currencies are already dead. However, this is not true. He says that the fundamental drivers of the decentralized technology network are growing.
As mentioned before, he took different relevant data points that allow analysts to see that Bitcoin’s fundamentals continue to grow.
It is possible to see that the number of blockchain wallet users has increased over time. During this year, the number of users for this wallet increased more than 44% from 21 million to 31 million.
The cost per transaction has also decreased from January 2018 until now. It dropped from $162 down to $21. This represents a decrease of 87%. If this is not enough, the total number of transactions has also increased over the last two years almost in a linear way during 2018.
Pompliano wrote about the analysis he did about Bitcoin’s fundamentals:
“Price is only one measurement of value for an asset. While it is important, it is not an important measurement of future value. The underlying fundamentals for the Bitcoin blockchain appear to be growing stronger despite the decline in the current price.”
It is also important to mention that the hash rate of the Bitcoin network has been decreasing during the last few months. This is related to an increased cost that miners need to face and a reduced price of Bitcoin. The most inefficient miners had to leave the industry and only those with greater capabilities are currently able to keep their operations. Since August, the hash rate of the Bitcoin network decreased by 46%. However, taking into account the long-term, Bitcoin’s hash rate increased substantially.
According to Pompliano, the number of active Bitcoin nodes has also increased during the last two years. He shows that it grew 98% during these last years.
At the time of writing, each BTC can be purchased for $4,154 dollars and it has a market cap of $72.3 billion. In the near future, a Bitcoin exchange-traded fund (ETF) could be approved, allowing the popular virtual currency to start growing again.