Bitcoin Users On-Chain Growing at “Insane Rates,” Majority of Noobs Not Even Counted
Institutions continue to buy the dips; MicroStrategy purchased an additional 205 BTC today, now holding 91,064 bitcoins.
The price of Bitcoin continues to fluctuate as it consolidates in the $40k-$50k range; however, there is no lull in the institutional interest.
Bitcoin continues to flow out of the US-based cryptocurrency exchange Coinbase at a fast pace as institutions buy the dips. Interestingly, most of the institutions haven't sold their Bitcoin since their OTC deals, as per Crypto Quant.
Yesterday, another 12,000 BTC flowed out from Coinbase, indicating institutions are accumulating.
Today, MicroStrategy also announced that it has purchased an additional 205 BTC for $10 million and now holds a total of ~91,064 bitcoins acquired for ~$2.196 billion.
Mempool is also indicating that the crowd is here. On-chain analyst Willy Woo noted,
“Mempool transactions peaking, reflecting the extra users coming onboard since January.”
Mempool is where all valid transactions wait to be confirmed, and a high number of pending transactions indicates congested traffic, which will result in longer average confirmation time and higher fees.
Heightened activity resulting in an increasing number of pending transactions waiting to be confirmed has been trending up ever since late last year when the price of Bitcoin went crazy and first broke its 2017 ATH of $20k and then hit a new all-time high above $58,300 last month. Woo said,
“Bitcoin users (on-chain) growing at insane rates, same as the final weeks of the 2017 bull market; BTC going mainstream.”
While the adoption curve is showing crazy growth, most of the user growth is not even seen on the blockchain. It happens at the exchanges, which have been breaking records in traffic, volume, and new sign-ups because the “majority of new users never use the blockchain.”
While millions of retail users are buying Bitcoin and crypto through PayPal, Robinhood, and Square’s Cash App, institutions are also anxious to get their hands on BTC.
Wealth manager Jim Paulsen, the CIO for Leuthold Group, which manages $1 billion, likes Bitcoin for “its correlation to stocks and other assets is extraordinarily independent,” but remains frustrated that he cannot own it for clients due to regulatory constraints and are left on the sidelines watching the leading cryptocurrency soar about 12x from its March lows.
According to a report from Citi, nearly 20% of advisors, up from 6.3% in 2019, are contemplating investing in cryptos due to inflation concerns. They are eagerly waiting for an exchange-traded fund (ETF) or mutual fund, which could bring in a lot of regulatory constraints and send the asset class higher.