Depressing Market Conditions Are Not A Hinderance For Bitcoin (BTC) Transaction Volumes
It might come as a surprise to many that even though the markets look very dire currently, the transaction volumes of Bitcoin are approaching all-time high. In fact, the transaction volume has picked up recently as total TXs have increased by 34% this year (since January 1st, 2019). This is higher than the levels of January 2018. There have been more than 350,000 daily bitcoin transactions that have been processed each day – so far this year.
— moon (@MoonOverlord) March 3, 2019
Notably, in December 2017, the network was experiencing the highest ever number of transactions with more than 490,000 daily. However, Bitcoin prices seem to be not moving or going in the other direction.
Another reason for growing transaction volume might be the surging adoption of Lightning Network. The Lightning Network is a “Layer 2” payment protocol that operates on top of a blockchain-based cryptocurrency. It enables fast transactions between participating nodes and has been touted as a solution to the Bitcoin scalability problem.
Additionally, the number of merchants accepting bitcoin payments worldwide has increased by over 700% in the past 6 years – Bitcoin directory service provider, Coinmap’s data suggests. Approximately 13% of the world’s (mostly urban) population has now used cryptocurrency to pay for items purchased through e-commerce sites, Kaspersky’s survey shows.
Senior market analyst at eToro, Mati Greenspan recently spoke to Bloomberg about the growing number of transactions and said:
“What I’ve been watching lately are the number of transactions on the Bitcoin blockchain and the total volumes across crypto exchanges, both of which are holding at their highest levels in more than a year…Even though we’re still officially in a bear market there is plenty of cause for optimism. Volumes have subsided somewhat from the late February excitement and volatility remains subdued. Transactions on the world’s favorite blockchain however, have seen yet another significant uptick as Bitcoin now processes an average of 4.05 transactions per second,” he wrote while referencing the below chart.
aMany analysts have said that there is no correlation between daily BTC transactions and the cryptocurrency’s price. This could be partially due to factors such as crypto traders being able to easily short bitcoin and having access to crypto derivatives products such as bitcoin futures.