2020-5-12 17:40 |
The past few days have been very volatile for the bitcoin price.
On Saturday and early Sunday morning hours, bitcoin erased 15% of its value to sink to the low 8K level. The BTC price pullback caught a majority of the traders with their pants down as over $275 million worth of long positions were liquidated on BitMEX. Moreover, the volatility was so intense that the Coinbase exchange experienced a brief outage.
Investor sentiment has now turned somewhat bearish just hours before the rewards for BTC miners are halved. Some analysts are even calling for $1760 as the possible bottom of bitcoin’s correction.
Glassnode co-founder Rafael Schultze-Kraft believes bitcoin’s fundamentals are stronger than ever, suggesting that investors should not be shaken out regardless of whether BTC takes a deeper dive in the short-term as the asset is bound to rise in the long-term.
Why Bitcoin (BTC) Looks Ultra Bullish In The Long-TermIn an extensive Twitter thread published a few hours ago, the co-founder of blockchain intelligence firm Glassnode, Rafael Schultze-Kraft looked under the hood to analyze bitcoin’s robust on-chain fundamentals and how they compare to the previous halving.
He then gave 10 telltale signs that make a compelling case for the price of bitcoin in the long-term.
1. The Incredible Growth Of The Bitcoin Network
The number of BTC addresses has been on a steady rise and is currently sitting at a historic high. This metric recently surpassed the 30 million addresses mark, representing an over 234% increase since the last halving in 2016.
2. The Fast Growth Rate of The Network
Schultze-Kraft notes that not only is the bitcoin network growing, but the pace of the growth is also incredible.
Data shows that the number of addresses added to the bitcoin network daily (the present growth rate, if you will) is 68% higher as compared to how it was at the last halving.
3. The Number Of Bitcoin Addresses Holding 0.01+ BTC Keeps Hitting ATHs
A record number of bitcoin hodlers are seemingly hedging against economic uncertainty.
According to Schultze, the number of addresses holding at least 0.01 BTC and 0.1 BTC has been hitting new highs almost every day this year. The addresses holding at least 0.01 BTC have increased by more than 204% since the last halving, while the ones holding 0.1 BTC have seen a 142% increase over the same period.
4. The Number Of Wallets Containing At Least 1 BTC Is Also Higher Than Ever
He also noted that the number of wallets containing a balance of at least 1 BTC has increased dramatically over the years. There are now at least 800,000 entities holding at least 1 bitcoin.
This is a new record as there are 64% more wallets holding at least 1 BTC today than they were during the previous halving four years ago.
5. The Number Of Bitcoin Whales On Track To Bulldozing To New Highs
The number of bitcoin whales holding at least 1000 BTC is approaching new all-time highs this year.
Although the number of whales has not increased significantly since 2016’s halving, the USD value held by these entities is 10X higher compared to during that time, he averred.
6. There Has Been A Steady Increase In The Network Activity
Additionally, there has been a continuous increase in the daily number of active addresses and entities in the last three years.
This metric is now nearing the record highs of the December 2017 bull run. Moreover, the number of both daily active addresses and entities has increased by more than 55% since 2016’s halving.
7. Bitcoin’s On-Chain Volume Remains Constant
The Glassnode co-founder further observed that bitcoin’s daily on-chain volume in terms of the US dollar has plateaued out since 2017, suggesting that there is sustained network usage.
The fact that no large increases have been witnessed is a sign that more investors are HODLing their coins, thus bolstering bitcoin’s store of value narrative.
8. The Bitcoin Mining Market Is At Optimum Health
Bitcoin’s hash rate – a measure of the computing power invested in coin generation- has been growing consistently throughout bitcoin’s history. This shows that the bitcoin network keeps getting stronger. As of now, BTC’s hash rate is up by approximately 6800% since the 2016 block subsidy reduction.
Although the rewards that miners receive are about to be slashed by half in a few hours’ time, the overall sentiment in the mining industry is still positive. This simply means that miners are not leaving the network.
9. The Consistency With Which Blocks Have Been Produced Over The Years
Lastly, he posited that bitcoin has been working as intended, 11 years down the line. He particularly notes that blocks have been produced on average with a surprising constant frequency, just as it was designed by the pseudonymous creator Satoshi Nakamoto.
10/ BLOCKS#Bitcoin simply works – like a clockwork. It's astonishing to see how the system's mechanisms continue to function as intended.
Over the years blocks have been produced, on average, with a staggering constant frequency – just as designed. pic.twitter.com/O7J3GqE3Yt
The bottom line is bitcoin is a highly volatile asset that is subject to wild price swings in the short-term. But, BTC’s strong fundamentals paint an insanely bullish picture for the price of the lodestar cryptocurrency in the long-term. As such, investors should look at the bigger picture, ignoring the short-term price action.
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