Bitcoin Nears 1 Million Daily Active Addresses as Bull Run Spurs On-Chain Surge

by

As a seasoned analyst with over two decades of experience in the financial markets, I have seen my fair share of bull runs and market corrections. The surge in Bitcoin’s activity this year is reminiscent of the internet boom of the late 90s, albeit on a more decentralized and digital scale.

This year’s upward trend in Bitcoin‘s value has led to a significant spike in on-chain activity, with the number of daily active addresses approaching one million – the highest it’s been in over three years following a sustained growth period.

Based on information from the on-chain analysis company IntoTheBlock, there’s been a clear change in Bitcoin’s long-term pattern, with on-chain activity displaying substantial increase along with the rising price of BTC.

The pattern of Bitcoin’s long-term activity has noticeably changed, as there’s been a substantial surge in on-chain activity. Notably, the number of daily active addresses is fast approaching one million, marking the first significant and sustained rise of this magnitude since 2021.

— IntoTheBlock (@intotheblock) November 26, 2024

It’s important to note that having an active Bitcoin address each day does not automatically equate to a unique daily user, as individuals are free to generate numerous addresses at their discretion. Experts usually advise creating multiple addresses for reasons related to privacy and security.

It’s important to clarify that the given figure may not accurately reflect one million individual active Bitcoin users. Instead, it might represent a large number of users who interact with Bitcoin through cryptocurrency exchanges. These exchanges sometimes combine funds from multiple users into a single address, which could lead to an apparent representation of assets belonging to many users, rather than just one entity.

Moreover, a significant number of investors choose to invest in cryptocurrencies and keep their assets secure in cold wallets, which often remain untouched for extended periods. These individuals, who are long-term holders, find these storage methods advantageous due to their enhanced security features.

Currently, Bitcoin is being traded at approximately $92,000, following a significant drop of over 6% in the past 24 hours. This decline began after Bitcoin came close to reaching $100,000. Over the past year, Bitcoin has experienced an increase of more than 144.5%.

From my analysis, I’ve noticed an intriguing development regarding the Coinbase Premium Index. This index, which typically indicates the price discrepancy between Bitcoin on Coinbase and other trading platforms, seems to have vanished or at least significantly narrowed as of late.

Based on a post from “maartunn” on CryptoQuant, it appears that the index in question vanished immediately when Bitcoin reached $98,000. This suggests that Bitcoin-related exchange-traded funds (ETFs) will need to take on a more active role to maintain the current high price level.

The Coinbase Premium Index represents the difference in price between Bitcoin trading on Coinbase against the U.S. Dollar (BTC/USD) and Bitcoin trading on Binance against Tether (BTC/USDT). When this index shows a positive value, it suggests that demand for Bitcoin on Coinbase is increasing, indicating rising buying interest on the exchange.

A significantly reduced price tag on premium items indicates a lack of strong demand among American buyers, a pattern that has previously aligned with the lowest points in Bitcoin’s market value.

Read More

2024-11-26 21:03