More and more people are buying and holding Bitcoin in ever larger quantities, which indicates a strong culture of the “Hodler”.
Buy and HODLN
Bitcoin’s weaknesses lie in the fact that Bitcoin, as a currency that can be used in daily payments, is hardly scalable. In 2019, the average block time for Bitcoin transactions was just under 10 minutes, so confirming a transaction would take 20 minutes to over an hour. Most cryptocurrencies process transactions much faster.
Bitcoin’s value as a speculative asset and its relative weakness as a transaction processing currency have contributed to a “Hodl culture” within BTC users. There are more and more Bitcoin addresses that hold ever higher Bitcoin amounts. In January 2011 there were a total of 34 whale addresses with 10,000 BTC. By the end of 2019, that number had grown to 130.
In the private customer business, Bitcoin addresses have increased from 51,000 to over 152,000 with more than 10 BTC. Despite tripling the number of whales in the ecosystem, this indicates that shoppers at the retail level are buying and holding more Bitcoin over time. The number of wallets with between 0 and under 10 BTC has decreased from 28 to 21 million since the end of 2017. The small owners have either paid off or are about to buy more.
Increase in addresses and transactions
With regard to the average active BTC addresses, the increase in Bitcoin has increased rapidly, especially since 2011, and has remained the same except for the drop due to the 2017 hype. More than half a million addresses intervene in the Bitcoin blockchain every day as recipients or senders of funds. The growth rate has been over 40,000 percent in the last decade. Until 2011 there were only 5,000 daily transactions on the network. On December 14, 2017, the number peaked when one million wallets came in contact via the Bitcoin Blockchain.
Looking at the newly created addresses over time, the growth of Bitcoin is undeniable. In 2011, an average of 7,100 new addresses were created each day. This number has risen to over 350,000 new addresses per day. The number of newly created addresses is around 11 million per month. There are now over half a billion Bitcoin addresses. It is noteworthy that over 800,000 of the million transactions that took place on December 14, 2017 were carried out by new addresses.
All of these indicators strongly remind us of what trump card Bitcoin has become. The value of the assets has decreased despite the steady growth in transactions. Now that there are more BTC in the wallets, it shows that the market could be heading for another price rally.