The Truth About Bitcoin's Rising On-Chain Addresses
Although the number of on-chain addresses holding a balance is rising, there may be more to the story.
Though Bitcoin's price has been suppressed for months, this may not necessarily mean that adoption of the asset is slowing down. In fact, many believe that this is only a temporary setback, and that Bitcoin will continue to gain popularity as a result of its unique properties.
On-chain data from IntoTheBlock shows that the number of non-zero Bitcoin addresses has steadily increased since the crypto market peak in November. This is a positive sign that suggests more people are holding onto their Bitcoin, even as prices fluctuate. This could indicate that investors are confident in the long-term prospects of the cryptocurrency.
Do you address people as "people" or "addresses?"
The crypto intelligence platform indicates that 41.9 million addresses currently hold a balance on Bitcoin's network. This is just shy of the all-time high of 42.07 million addresses logged in early August.
“The number of #Bitcoin holders has been growing in the bear market,” said IntoTheBlock on the matter last week. “Over 42M addresses are currently holding $BTC, 4.5M more than a year ago.” Bitcoin addresses with a balance vs. price. Source: IntoTheBlock
The number of addresses on a blockchain does not necessarily correlate to the number of users. One person may have multiple addresses (for security purposes), while multiple people may use one address (for example, on a crypto exchange).
Ledger's decision to bake multi-address accounts into their software by default is a great move that will increase on-chain privacy for users. By generating a new address for the user every time they select "receive", their payments will be more difficult to link back to their identity. This will help protect users' privacy and keep their personal information safe.
The Bitcoin network continues to see a decline in the number of active users, with just 2.36% of addresses holding a balance this week. This is down from 12% back in 2013, indicating a significant drop in interest and use of the cryptocurrency.
I believe that the number of daily active addresses will continue to increase in the coming years. This is due to the increasing popularity of cryptocurrencies and the benefits that they offer. With more people using cryptocurrencies, the number of addresses will continue to grow.
Bitcoin's Distribution: How the Wealth is Spread Out
As IntoTheBlock's data shows, Bitcoin's ownership concentration is now 89.6% within retail hands. This indicates that a growing number of individuals are buying and holding Bitcoin, rather than institutions or other large investors.
It's interesting to see that even though retail investors are defined as those with less than 0.1% of the circulating supply, they still hold more than 19,000 BTC. That's more than the amount held by billionaire Michael Saylor! It just goes to show that you don't need to be a whale to make a significant impact in the crypto world.
The data shows that "Hodlers" are the most common type of investor, numbering 29.78 million. "Cruisers" (1-12 month addresses) are at 14.85 million as of Monday, while the remaining 2.33 million addresses are "Traders" (1 month or less).
Looking at the data over the long term, it appears that hodlers tend to consistently increase their holdings, while traders tend to buy and sell in cycles with Bitcoin's price. This suggests that hodlers believe in Bitcoin's long-term potential, while traders are more focused on short-term price movements.
It is interesting to see that long-term holders of Bitcoin are selling their assets even though they are taking a loss. This could be indicative of a change in market sentiment, or simply of individuals taking profits after a long period of holding.
Despite the bear market, Bitcoin holders are on the rise. This is due to the fact that Bitcoin is a decentralized currency which is not subject to the whims of governments or financial institutions. Bitcoin holders are able to hold onto their currency without fear of inflation or confiscation.