5 on-chain trends show Bitcoin fundamentals are “incredibly good” 🚨 This article is 4 years old...
5 on-chain trends show Bitcoin fundamentals are “incredibly good”
2 min read
Updated: Oct. 23, 2020 at 12:28 pm UTC
Bitcoin is roaring higher after weeks of consolidation in a $1,000 range between $10,000 and $11,000. The leading cryptocurrency currently trades for $13,000, its highest price year-to-date, save for a quick blip above $13,200 on Wednesday.
Underpinning this surge higher is a set of on-chain fundamentals and narrative fundamentals that are set to drive the price of the coin even higher in the future.
Strong on-chain fundamentals to boost Bitcoin further
Lucas Nuzzi, a blockchain data analyst at Coin Metrics, recently highlighted five key trends suggesting that Bitcoin’s fundamentals are “incredibly good.”
They are as follows:
- The percentage of BTC being held for at least one year in addresses has reached an all-time high value near 65 percent. This indicates that an increasing number of investors see the coin as a store of value, which compresses supply available in the market, driving up prices.
- BTC stored on centralized exchanges has been consistently decreasing in 2020, which is a testament to the point above. Bitcoin is also being increasingly held by its owners as opposed to centralized counterparties due to hacks, regulatory risk, and other trends.
- Bitcoin’s hash rate continues to set new all-time highs as mining companies continue to form partnerships and install more farms, driving this metric, which tracks the security of the network, higher.
- The count of addresses holding more than one dollar worth of BTC has reached an all-time high. This suggests that there is an increasing adoption of Bitcoin.
- Bitcoin’s annual inflation rate has crashed as a result of the halving. Some investors have been expecting an institutional “supply shortage” as the amount of BTC available to be sold gets squeezed away by long-term holders and buyers.
Far from the only trend favoring bulls
It’s not only Bitcoin’s on-chain fundamentals looking good.
The cryptocurrency is in the midst of seeing a renaissance of institutional adoption, where prominent investors and corporations are embracing Bitcoin and digital assets in many different ways.
On Thursday morning, Paul Tudor Jones, a billionaire Wall Street investor, took to CNBC once again to talk about Bitcoin. This time, he said that he sees the innovators in this space as similar to Steve Jobs early on in Apple’s days:
“I’ve never seen a store of value where you also have [such] great intellectual capital behind it. […] When you short the bond market as an inflation hedge you’re really betting on the fallacy of mankind rather than its ingenuity.”
PTJ said something incredible on CNBC today.
"I've never seen a store of value where you also have [such] great intellectual capital behind it. […] When you short the bond market as an inflation hedge you're really betting on the fallacy of mankind rather than its ingenuity."
— Hasu (@hasufl) October 22, 2020
This comes as PayPal has embraced cryptocurrencies by adding digital asset support, as Square has deployed one percent of its assets into Bitcoin, and as fiscal and monetary stimulus has made BTC’s scarcity more apparent than ever.
Bitcoin Market Data
At the time of press 12:28 pm UTC on Oct. 23, 2020, Bitcoin is ranked #1 by market cap and the price is up 0.68% over the past 24 hours. Bitcoin has a market capitalization of $241.03 billion with a 24-hour trading volume of $35.16 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 12:28 pm UTC on Oct. 23, 2020, the total crypto market is valued at at $396.22 billion with a 24-hour volume of $103.97 billion. Bitcoin dominance is currently at 60.80%. Learn more about the crypto market ›
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
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Coin Metrics is a leading provider of crypto asset market and network data.