Bitcoin’s Price May Be in the Gutter, But BTC Transactions Volume and Activity Per Day is Rising
Bitcoin has been in a bear trend during 2018. Its price dropped from $20,000 in December 2017, to $3,250 a few months ago in December 2018. During the hype, there was an irrational exuberance that created a bubble effect. Finally, it dropped and led to the longest bear market ever experienced by Bitcoin (BTC) in all its history.
Several individuals were claiming that Bitcoin is dead and that there is no adoption around it. However, these individuals are just having a look at the price rather than the whole fundamentals behind Bitcoin and digital currencies.
According to the cryptocurrency users on Twitter, RamenLee, the transactions per day on the Bitcoin network are reaching the same level as in November 2017, just a month before the bull run that the market experienced.
— CryptoLeee 🍜 (@CryptoLeee) February 4, 2019
This shows that activity on the Bitcoin network is growing, even when the market continues to look bearish. The information provided by this Twitter user can be seen at Bitinfocharts. On February 5, the number of transactions registered was 353,922. That represents an increase of over 150% since the lowest point in 2018 in April. At that time, the number of transactions was 134,000.
Bitcoin transactions per day reached an all-time high in December 2017 when the network processed 490,000 transactions in just a day. At that time, the network was congested and the fees paid by users were very high. The scalability issues were clearly one of the main topics at that moment.
After this situation, transactions dropped substantially and several companies, including wallets, crypto exchanges, and other platforms, implemented the Segregated Witness (SegWit) solution. This implementation allows Bitcoin to process more transactions per block. Thus, reducing congestion during peak times, fees and transaction times. According to data provided by Woobull Charts, SegWit adoption is close to 40%.
The Lightning Network (LN), a second layer scaling solution for the most popular digital currency has also been growing in the market throughout 2018. This shows that developers are working day after day to improve this solution and allow Bitcoin to scale and process hundreds of thousands of transactions per second. Although the solution has not yet been released to the market, several developments have been made during the last year.
The number of transactions is not the only fundamental that is currently growing. Jameson Lopp, the CTO of Casa, made a summary of the most important advancements in the virtual currency market during 2018. Although the price is an important thing to take into account when analyzing a digital asset, is not the only important measurement. As mentioned before, SegWit and the LN have been growing at very fast rates during the last months.
Murad Mahmudov, a crypto trader and Bitcoin analyst, said that tweets related to the most popular virtual currency are currently at the same levels as in 2014. That’s even lower than at any point in 2016.
This is very negative for the price in the short term. There are fewer individuals caring about digital currencies and decentralization around the world. Additionally, he mentioned that 99% of people on earth do not care about Bitcoin. Thus, this digital asset could be remembered as a speculative asset rather than as a virtual currency that aimed at changing the world. Indeed, he went on saying that Bitcoin could potentially reach $1,700 in the near future.
The number of growing transactions are also very important for space. Although Mahmudov explained that mentions in social media are very low and reaching new lows in years, Bitcoin is being used by several individuals around the world. There are many use cases in countries such as Venezuela or Zimbabwe, were people cannot trust the local fiat currency because it has no value at all.
Dan Morehead, the CEO of the cryptocurrency investment firm Pantera Capital, agrees with the fact that Bitcoin fundamentals are much better than in 2017. This is very bullish for the future, even when in the short term Bitcoin’s price could keep struggling.
At the time of writing this article, Bitcoin is being traded around $3,410 and it has a market capitalization of $59.76 billion, according to CoinMarketCap. In the future, if Bitcoin demand remains stable or grows, with a supply reduction, the price could start growing once again in a much faster way than in previous bull markets.