Huge increase in Bitcoin users hints at bull run

With the third Bitcoin halving now less than a week away, the number of active Bitcoin addresses is booming.

2 min read

May 7, 2020

Since the beginning of 2020, Bitcoin has seen the number of daily active addresses skyrocket. According to the 7-day average, the number of daily active Bitcoin addresses has climbed from 643,000 to 945,000—a 47% gain.

This value is now gaining on the all-time high of 1.19 million addresses, achieved near the height of the Bitcoin bull run in December 2017. Much of this growth occurred in the last month alone, during which the 7-day average for daily active Bitcoin addresses climbed from 746,000 to 945,000—up 26.7%.

The number of active Bitcoin addresses is rising. Image: CoinMetrics

Historically, the number of active Bitcoin users has loosely correlated with the price action of Bitcoin. This is particularly apparent in the run-up to a bull run, during which the number of active Bitcoin addresses frequently climbs.

Defined as the number of Bitcoin addresses that either sent or received Bitcoin during the test period, the number of daily active Bitcoin addresses is commonly used as a proxy for number of active Bitcoin users, since more active addresses typically means more users. That said, the ratio of active addresses to users isn't exactly 1:1, since many users generate a new address for multiple transactions.

The number of daily active Bitcoin addresses is now at its highest value since January 2018. At this time, Bitcoin was valued at $11,500, compared to $9,300 today. Likewise, the average transaction fee at the time was $10.60, compared to just $1.87 today—although fees have been spiking.

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