On-chain Bitcoin Activity Reverses Multi-Month Decline Streak with Increases in Avg. Daily Transactions, Payments: Report

Blockchain.com, a crypto wallet provider, digital asset exchange, and block explorer service, notes in a recent crypto market report that longtime Bitcoin (BTC) investors have “historically been able to count on two core price dynamics.”

As mentioned in a blog post by Blockchain.com, Bitcoin’s price (exchange rate) is “often extremely volatile.” After huge plunges BTC’s price will “bounce back,” the report added while noting that “true to historical form,” the flagship cryptocurrency’s price has “once again rebounded.”

As stated in the report, dated September 10, 2021:

“This week Bitcoin reclaimed ~82% of its all-time high of ~$64k achieved in mid-April 2021. While Bitcoin’s climb above the $52k level on Monday did leave it short of making a new all-time high, the relatively quick reversal since the 20 July cycle low below $30k supports our view that the crypto bull market remains intact.”

Importantly, every price rebound like this one “strengthens confidence in crypto’s resiliency,” the report added.

The report further noted that “as more people a) come to understand that Bitcoin is not going away and b) look with an open mind at how it compares with gold and fiat currencies, it becomes hard not to see its continued growth into a new global reserve currency as inevitable.”

The report also mentioned that Bitcoin (BTC) saw a second straight positive monthly close for August “+13% and rallied sharply at the start of Sept. as the first ever government (El Salvador) announced an investment in Bitcoin.”

Ethereum (ETH) was “up +31% in August on the back of a resurgence in demand for non-fungible tokens (NFTs), while some ETH competitors such as Solana (SOL) saw even more impressive growth,” the report from Blockchain.com noted.

The company added that “key to the outlook for crypto markets over the next several months is whether fundamental demand drivers can sufficiently counterbalance growing regulatory uncertainty.”

The report continued:

“On-chain bitcoin activity reversed its multi-month decline streak with strong increases in both avg. daily number of transactions (+9%) and payments (+5%) Average daily bitcoin fees continued to drop from $4 / transaction to $2 / transaction month-over-month. The decline in average bitcoin fees has continued since May 2021.”

Declining BTC transaction fees “contrast with Ethereum ‘gas’ (transaction) fees, which have remained high and have recently been averaging over $50/transaction,” the report noted while adding that the Blockchain.com team is “skeptical that Chinese authorities were successful in eliminating all bitcoin mining in China.”

The report pointed out that Ethereum was up an “even more impressive +31% in August on the back of a resurgence in demand” for non-fungible tokens (NFTs). The report also mentioned that equities (+3%) and the US dollar (+0.7%) were “up for August (+2–4%), with long-dated US bonds (-0.5%) and gold (-0.2%) slightly down.”

As noted in the report from Blockchain.com, government is “arguably the last remaining major investor category missing from bitcoin’s incredible journey to becoming a new global reserve currency.”

The report added that the launch of Bitcoin as legal tender in El Salvador on Tuesday, “alongside El Salvador becoming the first ever government to announce an investment in bitcoin, appears to have been a key catalyst behind BTC climbing back above $52,000 on Sept. 6th.”

The report further noted that the flash crash crypto markets “subsequently suffered on Tuesday Sept. 7th came as leveraged borrowing climbed and excessive exuberance returned to crypto futures markets, leading to rapid liquidation of speculative positions.”

As stated in the report:

‘It appears from anecdotal reports and official announcements that a very significant share of crypto mining previously conducted in China has either relocated outside China or gone offline. However, we are skeptical of claims that Chinese authorities were successful in eliminating all bitcoin mining in China.”

The report also noted that there’s “evidence that some large mining pools thought to include a very significant share of China-based miners, such as AntPool, have seen their market share maintained or even increase of late in spite of China’s mining crackdown.”

Some mining analysts have “quietly estimated as much as 30% of the pre-crackdown ASICs (crypto mining computing hardware) to be still either operating in China or waiting to come back online after the Chinese regulatory heat has cooled,” the report revealed.

Sponsored Links by DQ Promote



Send this to a friend