- With the halving fast approaching, the Bitcoin market is surging.
- Beyond price, the number of new (and small amount) addresses is on the rise, while long-term hodlers continue to accumulate.
- Positive metrics point towards a boom in spot market activity, where retail investors are driving the rally.
The Bitcoin halving is just days away, and trending right along with the cryptocurrency’s price, is the surge in network activity. And that’s especially true among new and small account users.
And the share of new addresses within this sample size is encroaching on 2017 levels as well. According to Glassnode data shared on Twitter by CoinCorner CEO Danny Scott, the number of new Bitcoin addresses that have sent their first transaction is nearing 500,000.
New #Bitcoin addresses involved in their first transaction just passed 𝗠𝗮𝘆 𝟮𝟬𝟭𝟳 peak this week hitting 𝟰𝟵𝟭𝗸
Not quite near the 𝗗𝗲𝗰𝗲𝗺𝗯𝗲𝗿 𝟮𝟬𝟭𝟳 of 𝟴𝟬𝟬𝗸
But could we mirror the 𝟮𝟬𝟭𝟳 𝗿𝘂𝗻? pic.twitter.com/4UlChrJpvH
— Danny Scott ⚡ (@CoinCornerDanny) May 7, 2020
What’s more, data from Glassnode also indicates that the number of addresses holding a relatively small amount of Bitcoin (up to 1 Bitcoin, 0.1 Bitcoin, and 0.01 Bitcoin) are on a steep upwards climb, creeping towards new all-time highs of 8.25 million, 3 million, and 310,000 addresses, respectively. Conversely, addresses with large amounts of Bitcoin (up to 10, 100, 1,000 and 10,000 Bitcoin) are below their all-time highs.
This could mean one of two things: The increase in small addresses could signify newcomers to Bitcoin. But they could also be coming from long-term holders who, in typical privacy-minded, Bitcoiner fashion, create new addresses whenever they move coins.
Either way, Glassnode noted in its latest newsletter that their “Holder Net Position Change” metric, which measures whether long-term Bitcoin holders are accumulating, “stayed positive during the [past two months] recovery, indicating optimistic sentiment and longer-term confidence as we approach the Bitcoin halving next week.”
As smaller addresses continue to surge on Bitcoin’s blockchain and OG hodlers accumulate, this corroborates data that suggests this pre-halving rally has been largely fueled by “spot” markets (or, where retail investors go to buy coins).
Prices moving sharply higher against a backdrop of relatively flat funding speaks of a largely spot driven market. pic.twitter.com/g94zmH68aS
— Alex Krüger (@krugermacro) May 6, 2020
All signs point to increased interest in Bitcoin with the halving fast approaching. Transaction volumes are up 64% year to date, according to Glassnode, and Bitcon’s market cap has increased by more than 30%, with the price of Bitcoin today breaking past $9,500. According to data from BitInfoCharts, social media mentions and Google searches for Bitcoin have also risen exponentially since January.
If anyone needed reminding, this rally comes after a historic sell-off that cut Bitcoin’s price in half from $8,000 to $4,000 on Black Thursday.
But that hasn’t deterred spot market participants; according to data shared with Decrypt from cryptocurrency data firm CryptoCompare, April 30 saw record volumes across both Bitcoin and altcoin spot markets, more so even than 2017’s run-up.