Despite the consolidation in price over the last week, Bitcoin is getting strong indicators that the most recent rally will be different from the exponential price jumps experienced in 2017.
While current traders may be turning bullish towards the top cryptocurrency by market capitalization, long-time investors and industry followers remember a similar shift in sentiment occurring two years ago. The price of Bitcoin skyrocketed from just above $1000 to an all time high of $20,000 during the course of 2017, with the majority of the price increase coming from an exponential leap at the end of the year. The result was a bloat, overbought market that led to last year’s “crypto winter” and bearish conditions which shed BTC of more than 80 percent of its value.
Now, it appears that adoption for both Bitcoin and cryptocurrency in general is reaching an all time high. Since the start of 2019, the industry focus has been on growing adoption and integration for cryptocurrency across a variety of sectors. Compared to years past, companies have turned to blockchain and crypto as a legitimate industry improver, culminating in the development of a Facebook Coin by the social media giant and a JPM Coin by one of Wall Street’s most heralded banks.
Transaction volumes, in particular, favor rising Bitcoin adoption and usability. Large swathes of user wallets remained dormant throughout last year’s bear cycle, as BTC investors neither spent nor moved their funds corresponding with the depressed market prices. Following the 30 percent jump in price for Bitcoin valuation over the last week, the original cryptocurrency also celebrated a massive milestone in the history of its usage: the 400 millionth transaction sent since the currency first came online in 2009.
In addition, Bitcoin is averaging over 350,000 transactions per day, with about 4 transactions being sent every second. Those numbers may not rival a payment platform like Visa, which processes over 150 million transactions per day (1600+ per second), but it represents a solid start for a currency that is repeatedly ridiculed over lack of use. For perspective, when Bitcoin hit its all time high in price during late December 2017, daily transaction volume peaked at 490,000–despite having a valuation nearly four times that of today’s BTC.
Rather than languishing in user wallets or exchange accounts, the growing BTC transaction volume is indicative of a user base that is becoming more active. Scalability, as outlined by many industry leads including Coinbase’s Brian Armstrong and Cardano’s Charles Hoskinson, should continue to be at the epicenter of cryptocurrency development.
Visa may have a substantial edge on Bitcoin in terms of user adoption, but they also have a payment platform capable of handling 65,000 transactions per second at max capacity. Bitcoin, like most cryptocurrencies, is in need of massive improvements to reach the scalability necessary for widespread adoption–a reality that could happen sooner, rather than later, if a Facebook or Amazon were to begin promoting the currency.
Nonetheless, adoption and increased daily volume signals strong growth for Bitcoin outside of recent bullish price movements.
