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As bitcoin continues to set new price highs, its network is also seeing record user activity.
As of Tuesday, there were 432,451 “active entities” – portfolio clusters controlled by a single participant sending or receiving funds over a 24-hour period. This is an all-time high, according to data provided by blockchain analytics firm Glassnode. The previous peak of 410,972 was recorded on December 9, 2017.
“The number of active entities has steadily increased since the halving and means a large increase in participant adoption of the network,” said Matthew Dibb, co-founder of Stack, a provider of cryptocurrency trackers and index funds.
Bitcoin suffered its third mining reward halved on May 11 this year. Since then, the number of active entities has increased by 70% and the price of bitcoin has more than doubled to nearly $ 20,000.
The cryptocurrency printed a record $ 19,920.53 on Tuesday before turning back. Bitcoin was trading around $ 19,130 at the time of writing, representing a 1.7% gain over the course of the day.
While bitcoin’s price gains have been relatively strong over the past eight weeks, the number of active entities has tracked relatively steady growth. “While the metric broke through highs it hadn’t seen since 2017, it did so gradually without ‘bubble-like’ growth,” Dibb told CoinDesk. “We take comfort when we correlate address clusters with forward-looking price action.”
Analysts view the rise in activity as a bullish sign. “When there is greater use, there is more demand for the cryptocurrency and that drives the price up,” Philip Gradwell, chief economist at blockchain intelligence firm Chainalysis, told CoinDesk earlier.
The number of active entities rose to multi-month highs in early September, despite multi-week sideways price action in the $ 10,000 to $ 12,500 range, signaling a continued rise in adoption and warning of a breakout of prices. The rise in activity to all-time highs suggests that bitcoin’s rally is sustainable.
“Our expectation is that this metric will continue to rapidly surpass previous highs as bitcoin surpasses $ 20,000,” Dibb said.
