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Bitcoin is no longer perceived as a medium of exchange, but as a store of value.
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Users are now less willing to give up their bitcoins.
Cryptocurrency research firm CoinMetrics says the price of bitcoin is set to take off to unprecedented levels. Analysts say the growth observed in the metrics studied after the market crash in March of this year suggests that the biggest take-off in the history of the cryptocurrency pioneer is on the way.
In their State of the Network report 74, analysts found optimistic indications in the metrics they have studied since March. They mention how there has been a remarkable recovery for bitcoin since its price plummeted along with other markets in light of the panic caused by the COVID-19 pandemic. The momentum it has had since then makes it possible to determine it the rally the one that is approaching will not be the same as the previous ones, notes CoinMetrics.
The document points out that historically the price of bitcoin has peaked after a year and a half halve. However, this time, unlike before, It is necessary to take into account the new perception that users have towards bitcoin. This new level of appreciation, which comes just six months after the miners’ reward was halved, are bullish indications according to analysts.
Since March, analysts have so far found that more users understand that bitcoin is digital gold and use it more as a means of storing value. Mashed potato, more users understand the importance of being custodians of your funds. In the report, this data is displayed in various metrics.
Bitcoin is digital gold
Researchers are paying attention to the shift in the correlation of the former cryptocurrency against gold and the US dollar. In this regard, CoinMetrics underlines that, from 12 March, BTC’s correlation with gold has peaked, while with the dollar it fell to the lowest levels.
The document refers to recent investments highlighting the value of bitcoin as a support resource for companies like MicroStrategy and Square. According to Coin Metrics, this reinforces the thesis that now The first of the cryptocurrencies is increasingly perceived as digital gold.
It also highlights the growing trend towards long-term storage of bitcoins, which confirms that cryptocurrency is perceived as a means of preserving capital, just like gold.
In fact, an example of this shift in bitcoin perception is the percentage of bitcoin that hasn’t moved in a year. For example, as of October 25, the percentage of bitcoins kept in chain for one year reached 62.5% of the total offer of the cryptocurrency, reaching its all-time high.
With previous data, CoinMetrics suggests that users may understand that the longer they keep their reserves in the chain, the higher their profitability will be by keeping control of their money. Previously, the percentage of real estate supply for at least 1 year It was only recorded when the bitcoin price was at its lowest levels.
Bitcoin as a store of value
The report shows that bitcoin is no longer perceived as a medium of exchange, but rather as a storage medium. Analysts come to this conclusion because bitcoin’s speed is also at its lowest since 2011.
Speed is an indicator that measures how many times an average percentage of the offer has been carried over in the last year. If a high speed is recorded, it means there is more rotation than that average percentage. Therefore, the decrease in speed currently taking place indicates that BTC it is no longer used as a medium of exchange, but as a store of value.
More users with bitcoins and keys in their possession
According to analysts, to date, the number of addresses that shop of at least $ 100 in BTC has reached a new high (9.74 million). This positive momentum signals the long-term adoption of the first cryptocurrency. “A single person or entity can control multiple addresses, so this only shows an approximation of usage. But the trend suggests that the number of BTC holders is on the rise, which is a positive sign for the long-term adoption of BTC “, reads the document.
Another metric that researchers are paying attention to is the trend of users of not to safeguard funds in BTC in exchanges centralized. This is partly due to the desire of users to store their bitcoins independently, focusing on the long-term prospects.
Along with the CoinMetrics report, a CriptoNoticias article reports that the performance of bitcoin this year was superior to that of traditional markets, including companies like Amazon, Google, Apple, and Facebook. Bitcoin’s behavior in the market is even better than that of gold and indices such as the S&P 500 and Nasdaq 100.
Additionally, hedge fund investor and founder Paul Tudor Jones believes the rally bitcoin is at its prime inning. Fund founder Tudor Investment Corporation said in a recent interview that the unprecedented increase in liquidity by the US Federal Reserve (the Fed) sets the stage for a return of significant inflation.
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